Asian markets drop, exporter firms weighed by strong Yen ~ Forex Special

Wednesday, August 4, 2010

Asian markets drop, exporter firms weighed by strong Yen

Forex Special (Barcelona) - Most Asian markets have been going through declines on Wednesday with Japanese exporter firms weighed by Yen strength, which makes their products more expensive overseas, while US economy continues showing reasons for concern.

Japanese Nikkei Index dropped 2.2%, Australian S&P ASX Index dipped 0.4%, South Korean Kospi Index edged 0.2% down and Chinese Shangai Composite Index fell 0.3%. On the positive side, Hong Kong Hang Seng Index advanced 0.2%.

Shares Japanese firms, heavily dependent on exports, have dropped considerably, weighed by a strong Yen, which rose on Asian session to a fresh 8-month high at 85.30. Furthermore, US economic recovery continued showing signs of faltering, as Consumer Spending, factory orders and pending home sales posted weaker than expected readings.

Dollar at multi month lows

USD/JPY decline from 88.10 high in July 28 extended lower on Tuesday, as the Dollar plunged across the board on concerns about US economic recovery, and the pair broke below 85.85 (Nov 30 low), to reach a fresh 8-month low at 85.30 so far.

EUR/USD resumed its uptrend from 1.1800 year low on early June, and the pair broke above 1.3195/05 resistance area, to hit a fresh 3-month high at 1.3260 on US session, and ease afterwards, reaching 1.3200 area at the moment of writing.

GBP/USD rally from 1.4200 low in May extended on Tuesday to fresh 6-month highs above 1.5900, although the pair was capped right at 1.5970; 61.8% Fib retracement of the 1.70-1.42 decline, and pulled back during Asian session to levels right above 1.5900.