Yen, Dollar rise as credit crisis fears spread. | CountingPips Forex Blog

October 6, 2008 - Forex Economic News

Yen, Dollar rise as credit crisis fears spread.

The Japanese yen and U.S. dollar have been the beneficiary of credit crisis fears spreading today as stock markets around the world have declined and currency traders sold off high yielding currencies. The Dow Jones Industrial fell below 10,000 today for the first time in four years while the NASDAQ fell 4.3 percent and the Standard & Poor's 500 index dropped 3.9 percent today. European stock markets also tumbled as London's FTSE 100 and Germany's DAX both Yen gains in Forex Trading fell more than 7 percent while Paris's CAC 40 fell 9 percent. The Japanese Nikkei average declined 4 percent. The credit crisis has prompted European governments to action as Sweden today joined Germany, Denmark, Ireland and Austria in putting guarantees on bank deposits and a few new bank bailouts have been usher in(Germany's Hypo Real Estate, Belgium's Fortis).

The forex market has seen the yen and dollar as the recipients of risk aversion as the yen has gained against all of the major currencies today and the dollar has advanced against all of the majors except the yen.

Verses the yen, the euro dropped today to 137.44 yen per euro after opening at 143.41 earlier in the day. The euro has fallen against the yen for eight consecutive days. The pound fell from 185.49 to 177.59 yen per pound today and has fallen verses the yen for two straight days. The Swiss franc fell for the second day in a row verses the Japanese currency as the CHF/JPY traded below 89.00 yen per francs today. The Australian dollar fell from an opening exchange rate of 78.12 to trading below 73.00 yen per aussie while the Canadian dollar fell from 95.31 to approximately 92.50 after falling all the way below 91.00 yen per loonie. The U.S. dollar dropped verses the yen as the USD/JPY pair fell from an opening rate of 104.89 to below 101.60 in trading today.

Tomorrow's important forex news involves the Australian dollar as the Reserve Bank of Australia is scheduled to make an interest rate announcement at 3:30 GMT. The market expectation is that the RBA will reduce their interest rate from 7.00 percent to 6.50 percent.

USD/JPY Chart - The US dollar fell against the Japanese yen as the yen gained against all the major currencies today as the credit crisis has rocked the financial markets(Daily Chart).

Today's Forex Chart

tags: forex market, global economy, credit crisis

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