Forex News and Rumors for October 10th, 2008

Yen Set for Biggest Gains in 10 Years as Carry Trade Evaporates

The yen headed for its biggest weekly gain in a decade against the dollar as the global stock- market rout caused investors to sell higher-yielding assets funded with the Japanese currency.

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Global crisis claims Japan insurer, markets panic

Government ministers played down the risk of contagion from the collapse of an unlisted, small insurer in Japan, which has been a safe haven in a global crisis that has destroyed banks across the United States and Europe.

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Morgan Stanley Under Pressure on Mitsubishi Worries

Shares of Morgan Stanley have lost nearly half their value in the last three days, on worries Mitsubishi UFJ may back out of injecting the much-needed capital.

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Iceland, in Financial Collapse, Is Likely to Need I.M.F. Help

Such a move, which would make this small island nation the first sovereign state to fall victim to the credit squeeze that began last year, would require it to accept harsh measures to restore fiscal and monetary stability.

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Citi Ends Wachovia Talks but Sees Court Settlement

Citigroup said it’s ended negotiations with Wells Fargo in their fight to acquire Wachovia—but Citigroup’s effort to grab some assets of Wachovia may not be over just yet.

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Russia approves $86bn bank rescue

Russia’s lower house of parliament, the Duma, has approved a raft of measures worth $86bn (£51bn) to assist banks hit by the credit freeze.

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Singapore slides into recession

The south-east Asian country’s economy contracted by 6.3% in the third quarter, on an annualised seasonally adjusted basis, having shrunk by 5.7% in the second quarter of 2008. This forced the government to cut its growth forecast for this year from 4%-5% to 3%. Analysts had expected a small rise in GDP.

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IEA Cuts World Oil Demand Forecast on Weak Economy

The International Energy Agency (IEA) on Friday cut its oil demand growth forecast for 2008 to the lowest rate in 15 years, citing economic weakness and “a spiralling liquidity crisis”.

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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