Forex News and Rumors for October 16th, 2008 – Afternoon Update

Oil Below $70, a Price Last Seen in June 2007

Oil prices plummeted on Thursday, falling below $70 a barrel for the first time in 16 months, and prompting the OPEC cartel to call for an emergency meeting next week.

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US hedge funds suffer heavy withdrawals

Investors pulled at least $43bn from US hedge funds in September as market turmoil led to unprecedented withdrawals, an analysis by a leading research house shows.

The data from TrimTabs Investment Research – which was to be sent to clients late on Wednesday – come as hedge funds are working to prevent far bigger redemptions by the end of the year, when many funds give investors a chance to take out money.

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Credit Cards Could Become Next Trouble Spot in Crisis

As the economy worsens and unemployment rises, more Americans are having trouble paying off their credit card balances. That has pushed up losses for credit card issuers, forcing them to tighten standards, which puts a further squeeze on cash-strapped consumers.

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Bank of England Announces Reforms To Its Market Operations Framework

Thursday, the Bank of England revealed three major reforms that are intended to improve the functioning of its existing market operations framework. The central bank said it is planning to introduce two new permanent liquidity insurance facilities for banks to access in stressed financial conditions.

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Canadian stocks slump further

Stocks in Toronto retreated Thursday as commodities fell further on fears of an impending recession, with oil below $70 (U.S.) for the first time since August, 2007.

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FTSE shares plunge as Opec announces emergency talks

Share prices plunged today in the wake of an emergency meeting called by Opec for next week to discuss oil prices.

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Weekly Jobless Claims Fall By More Than Anticipated

Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended October 11th, showing that weekly jobless claims fell by much more than economists had been anticipating.

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SNB’s Roth: UBS Bailout Will Not Affect Monetary Policy

Thursday, Jean-Pierre Roth, the Chairman of the Governing Board of the Swiss National Bank, said the US$54 billion loan extended to UBS will not affect the central bank’s monetary policy in any way. The reason he cited was that the entire operation is funded by US dollars.

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Foreign investors hit the road

Foreign investors are still showing a voracious appetite for U.S. Treasury bonds…but they’re selling everything else the United States has to offer.

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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