Forex Market Outlook 8/24/11
By Mike Conlon, ForexNews.com on Aug 24, 2011 01:11:03 GMT
This morning’s early market action is looking a bit “strange”—for lack of a better word. We have been trading a narrow range after yesterday’s big move in US equities and it is unclear which way the markets want to go.
Asian stocks were decidedly lower overnight on news that Moody’s downgraded Japan’s credit rating and the markets were unhappy with Japan’s response to a strengthening Yen. It was announced that Japan would create a $100 billion facility to help businesses deal with a rising Yen. This is a far cry from intervention that some in the market had been hoping for, but it must be noted that this alone does not take intervention off of the table. Look for the BOJ to be tested in the not-so-distant future.
European stocks, on the other hand were trading higher despite lower than expected IFO business survey figures in Germany, which reached a 1-year low. Also weighing on the Euro is news that the Greek rescue efforts may be met with opposition as Finland is out saying that they would like collateral for loans to Greece. Not a good sign. Yet stocks in Europe are moving higher, most likely the result of renewed confidence in the banking sector that showed that banks did not need to access to funding facilities.
Gold is trading lower but oil is trading higher, and US equity futures just flipped to positive on the release of the US Durable Goods orders which came in better than expected. The expectation was for a gain of 2.3% after last month’s negative number and the actual reported showed a gain of 4%. This is a good number in light of recent negative economic data and was likely the result of Japan coming back on-line after their supply-chain disruptions.
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