FOREX IN REVIEW

FOREX IN REVIEW 



Risk-assets soared into the end of the week as speculation of further central bank intervention rebounded and Mario Draghi promised to defend the Euro "at all costs." Although no formal announcement of resumption of bond purchases, commodities and stocks ticked higher while bond sovereign yields fell. Meanwhile the Troika visit in Greece produced progress as further austerity cuts were implemented, paving the way for Greece to cover a €3.2 billion bond redemption on August 20th. Major equity indices jumped higher led by the 6.34% climb in the Italian MIB. The Spanish IBEX and Euro Stoxx 50 also moved dramatically higher, rising 6.00% and 4.83% respectively. EURUSD rallied over 200 pips into the end of the week nearing the 1.24 handle, trading presently at 1.2396.

The optimism that reflected last week's confidence in the Eurozone coupled with the U.S. jobs report has spread to the Asian session as the yen weakens and equity indices rose for the first time in four sessions. The Hang Seng index has added 1.99% while the Nikkei has risen 1.72%. The Australian ASX is also stronger, ticking up 1.18%. USDJPY is presently unchanged at 78.460. Economic concerns continue to linger in China while Japan is rebounding from a year of economic disaster led by earnings of auto giant Toyota. This positive news has also been echoed in commodity prices with crude oil back above the $90. Even though the rally was overdone slightly due to a possible tropical storm, it has stayed strong since a pull back to $91.19 per barrel.

Markets have been buoyed globally as the largest economy gets back on its feet with rebounding housing prices and better employment figures. According to the U.S. Bureau of Labor Statistics the economy added 163,000 jobs versus 64,000 prior however the unemployment rate rose to 8.30%. Renewed hope for a stronger recovery led equity markets higher as the Nasdaq gained 2.00% followed by a 1.90% rally in the S&P 500. The Dow Jones Industrial Average closed 1.69% higher. The dollar index fell sharply from last week's highs, sliding 0.09% today to 82.303. Corn has also slid, sinking -0.87% to $800.50 per bushel while soybeans decline -1.96% $1596.75 per bushel. Coming later today is commentary from Fed Chairman Bernanke, who is expected to make further remarks on the pace of recovery


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