Forex News and Rumors for October 6th, 2008

Euro, dollar take freefall vs. yen

The euro and the U.S. dollar took a freefall against the yen Monday in Tokyo, with Europe’s single currency briefly trading in the upper 139 yen range and the dollar in the upper 102 yen level amid continued financial instability.

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Stocks Fall Sharply in Europe and Asia

Stocks tumbled Monday in Europe and Asia, and oil fell below $90 for the first time since February as fears grew that the financial crisis is spreading to the world economy.

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Financial Crises Spread in Europe

European nations scrambled on Sunday night to prevent a growing credit crisis from bringing down major banks as troubles in financial markets spread around the world, accelerating economic downturns on three continents.

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In a Weak Climate, the USD Has Surprising Muscle

As the de facto reserve currency of the world, the US Dollar benefits from global upheaval, even those that originate in the United States. Currency traders are betting that because the United States was the first to falter, it will be the first to recover.

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Nikkei plunges 3.6% Monday morning

Tokyo’s Nikkei index fell 3.6 percent to a four-year low, on doubts about the health of the global economy and effectiveness of the recently approved U.S. financial bailout package.

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BOJ injects 1 tri. yen into Tokyo money market for 14th day

The Bank of Japan injected 1 trillion yen into the Tokyo money market Monday for the 14th business day of emergency operations in a further effort to facilitate interbank borrowing amid the financial market meltdown.

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Iceland moves to shore up economy

Iceland’s trade unions are being asked to repatriate their foreign-invested pension funds, in the wake of a financial crisis that has seen the country’s third-largest bank nationalised, the country’s credit rating downgraded, and the country’s currency the Krona losing a fifth of its value against the dollar by Friday.

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Australia’s recession not expected to be too bad

Australia will see a minor recession with some job losses, and inevitably a reduction in house prices. But the scale of the problem will be manageable as long as demand for raw materials out of China and India stays strong.

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This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza