Exacerbating the decline seemed to be concerns over the allotment of cash by major Central Banks as they continue to inject liquidity to institutions for the third straight day. EUR fell against the USD last night as market speculate that the central bank may decide to hold off tightening monetary conditions given the very precarious nature of money markets in the 13 member region. Also, with increased risk aversion, more unwinding of carry trades on the AUD, NZD and STG are likely to continue for a while.
The USD index, a measure of USD’s value against a basket of six major currencies, was up 0.44% to a reading of 81.087 yesterday, rebounded from a 15-year low reached a week ago at 79.957. A close above 81 would indicate a bullish pattern for the USD.
Markets will be anxiously awaiting Wednesday's CPI report, as signs that price pressures remain uncomfortably high for the Fed could lead fixed income markets to stop pricing in a September rate cut, since the central bank is unlikely to risk letting inflation get out of hand in order to spare the equity markets
Sell USD to JPY at 118.55 for target at 115.55. Place stop if breaks 119.20.
DOMAINS YAHOO FOR CONFERENCE CALL SERVICE
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