Monday, July 19, 2010

Asian markets open the week on sell tone; Euro and Pound, ease


Forex Special - Asian markets have been trading on a weak tone on Monday, following downbeat macroeconomic figures in the US on Friday, with Consumer confidence and corporate data posting worse than expected readings, and arising doubts abut economic recovery. In FX Markets, Euro and Pound have pulled back from multi-week highs.

Hong Kong's Hang Seng Index has dipped 1%, while South Korean Kospi Index dropped 0.4%, and Australian S&P Index lost 1.3%. Markets Japan are closed for National holiday. On the positive side, Chinese Shangai Composite Index rose 0.9% on the back rumours that the Government might support the Agricultural Bank of China's public offering to avoid a decline to levels below its offer price.

Investors sentiment deteriorated on Friday after the release of disappointing US consumer confidence figures and corporate earning results which triggered a negative session on Wall Street, with benchmark indexes losing around 2.5% of their value, and with fears about the possibility of falling back into recession, gaining ground.

Euro and Pound Ease

EUR/USD recovery from 1.1870 area on early June reached on Friday its highest level in the last two months, right at 1.3000, although the European currency pu8lled back as sentiment deteriorated after the release of US data, and the pair has been moving between 1.2880 and 1.2920 during Asian trade.

GBP/USD rally from 1.4220 lows on early June, stretched on Friday to a fresh 3-month high at levels right above 1.5400 to pull back on US session, and consolidate on a tight range around 1.5300 during Monday's Asian trade.

USD/JPY decline from 89.15 high on Jul 12 and 14 found support on Friday at a fresh 7 1/2 months at 86.20.m, and the pair bounced up slightly to trade between 86.40 and 86.70 during Asian session.

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