MORNING BRIEFING: Dollar hurt by Gulf oil report; Australia become the first G20 nation to raise its interest rates.

[RTFX-Trading]

MORNING BRIEFING: Dollar hurt by Gulf oil report; Australia become the first G20 nation to raise its interest rates.

What’s new:
Gulf states in talks on replacing US Dollar for Oil.
Japan: Finance Minister Fuji says he told G7 weak-currency policies aren’t desirable.
Australia: RBA raises rates to 3.25%.
United States: FED’s Dudley says soft economy warrants low rates.
United States: Non-manufacturing PMI returns to growth.

Today:


Overnight Rates and Indices:
EURUSD: 1.4749 – 1.4646.
USDCHF: 1.0324 – 1.0240.
GBPUSD: 1.6005 – 1.5929.
EURJPY: 131.45 – 130.73.
USDJPY: 89.65 – 88.86.
DowJones: 9'599.75 +1.18%.
NASDAQ: 2’068.15 +0.98%.
S&P 500: 1’040.46 +1.49%.
Nikkei: 9’691.80 +0.18%.
Shanghai: 2’779.43 +0.90%,
Gold: $1018245
Crude Oil: $70.97 
Comments:

The Reserve Bank of Australia raised its interest rates by 0.25bps to 3.25% and signaled further rises to come. The Australian Dollar rallied to a 14 month high following this news reaching 0.8876 against the greenback. Australia became the first G20 nation to hike interest rates as the global financial crisis eases.

The US Dollar was also hit hard this morning by a report published by The Independent in Britain that said Gulf Arab states were in secret talks with China, Japan and France to end the use of the dollar in oil trading. This additional pressure comes after recent weakness due to market expectations that the FED will not raise interest rates any time soon and the growing view that the greenback has become a funding currency for the ‘carry trades’. The Dollar fell to 1.4749 against the Euro, to 1.6005 against the Pound, 88.86 versus the Yen and to 1.0240 against the Swiss Franc.

Japan’s Finance minister Fuji, said he had no comment on current foreign exchange rates. He also added that he told the G7 weak-currency policies were not desirable and the world economy must not engage in competitive devaluations.

Have a nice day.

Emman Xuereb

RTFX Ltd
Head Office
The Cornerstone Complex, 16th September Square | Mosta MST 1180 | Malta
Tel:  +356 23 31 00 00
Fax: +356 21 41 24 58
Web: www.rtfx.com
Risk Disclaimer