Forex News: Dollar advanced vs major rivals after crude oil prices closed down, sending stocks higher, lifting market sentiment. "The trigger right now is both oil and secondarily, an improvement in (market sentiment)," said John McCarthy, manager of currency trading at ING Capital Markets in New York. Dollar rally part of overall financial market pullback after dour market performance early in week. "Essentially, the market got a little ahead of itself, far too negative," McCarthy said.
While sentiment better, analysts say comments by Fed Chairman Bernanke, FOMC minutes suggesting Fed funds rate will remain stable in near term should keep dollar at historically weak levels. Late Wednesday in New York EUR/USD at 1.5818 vs 1.5899 late Tuesday, USD/JPY at 105.17 vs 104.74, EUR/JPY 166.39 vs 166.56, GBP/USD 1.9986 vs 2.0046, USD/CHF 1.0179 vs 1.0107. Stocks gained on lower oil prices, better than expected earnings from Wells Fargo, up 33%.
Troubled mortgage lenders Freddie Mac +30%, Fannie Mae +31%. Dow +2.5%, Nasdaq +3.1%, Philly Semicons +3.5%. Treasury's lost ground as spike in consumer prices raised inflation fears; 2-year yield +6 bps at 2.45%, 10-year up 11.8 bps at 3.96%. Nymex August crude settled $4.14 lower at $134.60/bbl on swelling oil and product inventories. Comex August gold fell $16 to $962.70/oz on sell-off in crude oil.
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