Asian markets weaken as recovery hopes fade; Euro, lower ~ Forex Special

Tuesday, June 22, 2010

Asian markets weaken as recovery hopes fade; Euro, lower

Asian markets are going through declines on Wednesday, following a negative session in Wall Street, with investors sentiment dampened by weak US home sales data. In FX markets Euro and Pound have pulled back, while the Yen rose on risk aversion.

Tokyo Nikkei Index drops 1.15% at lunch-time in Japan, while Australian S&P Index dipped 1.1% and Hong Kong's Hang Seng Index edged down 0.1%. Markets in China and Singapore have also gone lower.

In Wall Street, the Dow Jones Index lost 1.43% on Tuesday, weighed by US home sales Index, which posted a 2.2% decline in May, putting an end to two consecutive months of advances, and showing, against expectations, that the recovery of the housing sector will be a long and painful process.

Euro and Pound at lower levels

EUR/USD has been moving southwards during the current week so far, and, after peaking at 1.2465, 4-week high, on early Monday, the pair has pulled down to find support at 1.2250 on Tuesday, and consolidate in Asia, between 1.2250 and 1.2280.

GBP/USD peaked on Monday at 1.4925, 5-week high, and the pair pulled down to find support on Tuesday at 1.4685 to bounce up after the release of UK Budget Statement, and consolidate above 1.4800 during Asian session.

The Japaese Yen has picked up amid risk aversion during the last sessions, and USD/JPY retreat from 91.45 high on Monday dropped to 90.35 area on Wednesday's Asian session, while EUR/JPY plunged from 113.40 high on Monday to levels below 111.00 on Asian trade, while GBP/JPY dropped from 136.00 on Monday, to 133.10 on Tuesday, before trimming losses and consolidate around 134.00 during Asian trade.