Asian markets mixed on week opening; Dollar, consolidating losses ~ Forex Special

Monday, August 9, 2010

Asian markets mixed on week opening; Dollar, consolidating losses

Forex Special - Asian markets have opened the week mixed under the influence of downbeat US Non-Farm payrolls last Friday, which dropped by 131,000, twice as much as expected. In Forex markets, the Dollar has remained consolidating losses after post-payrolls decline.

Japanese Nikkei Index declined 0.9%, while Australian S&P ASX Index added 0.3% and Hong Kong hang Seng Index remained flat, likewise the Chinese Shangai Composite Index.

Japanese Companies, strongly dependent on exports, continue suffering by Yen strength. The Japanese currency remains trading at its highest levels of the current year, after having rallied on Friday, following US labour data, which, makes Japanese products more expensive and less attractive overseas.

On the positive side, Chinese Steel and Cement companies have advanced, favoured by Government's demand to shut down obsolete plants, which could solve the overcapacity problem affectung the sector at the moment.

Dollar consolidating at low levels

EUR/USD continues rallying at steady pace after having bottomed at 1.1820 area in June, as the pair pushed higher on overall Dollar weakness after weaker than expected non-farm payrolls data, and the pair rose to a fresh 3-month high at 1.3335, to remain consolidating right below 1.3300 on Monday's Asian session.

GBP/USD recovery from 1.4220 area in May, extended last week to levels above 1.5800, and the Pound stretched higher after NFP report to hit a fresh 6-month high at 1.6000, which has capped the pair on Friday, and the pair remained consolidating between 1.5950 and 1.6000 during Asian session.

USD/JPY has remained trading lower since peaking at 88.10 high on Jul 20, and the downtrend extended last week to a fresh 8-month low at 85.00, after US payrolls report, less than 20 pips above 15-year low at 84.82 hit in November 2009. During Asian session, the pair has been going through a slight recovery, reaching 85.60 so far.