MARKET REPORT 17TH MARCH 2008
Good Morning,
The credit crunch appears to be far from over with Friday seeing Bear Stearns bailed out by JP Morgan and the New York Federal Reserve. This is the first time since the 1960’s that the
In the early hours of Monday JP Morgan has reportedly bought Bear Stearns for just $2.00 a share valuing the bank at just $236m down from $3.54bn on Friday. The Federal Reserve has cut the discount rate by 0.25%.This cut to the discount rate two days before the Fed are set to meet and decide on a 0.75% FED cut, has the market concerned for the US economy.
Dollar weakness was certainly the centre of attention last week with every new day bringing yet another record high in the EUR / USD which hit $1.5900 in the early hours of Monday morning during Asian trading. The USD / CHF fell below parity for the first time on Friday and the Euro hit a record high against Sterling in early Asian trading on Monday at 1.2640 (0.7911). The USD / JPY was not left unscathed closing out the week at 99.03. The negative USD sentiment was dealt yet another blow by multi year lows in The Michigan consumer sentiment index.
In the midst of global uncertainty and stock market decreases, investors have run for the relative safety of gold. The run on gold saw it close out the week just past $1003.00 an ounce.
The market will be waiting with great anticipation for the Federal Reserve’s rate announcement on Tuesday (18.15 GMT). Market commentators have suggested that we could expect to see a cut as high as 1%.
Michael Ince
Michael Ince
Senior Trader
First Rate FX
This commentary is generic and may not suit all circumstances. Before taking any action, we recommend either contacting your trader for guidance or obtaining independent financial advice. The information in this document was obtained from sources believed to be reliable but its accuracy and completeness cannot be guaranteed. The views and recommendations in this communication are typically short term trading views. Comments constitute views at the time of writing and are subject to change without notice. The rates shown are all indications. For specific quotations, please contact your usual trader. This document is not intended as an offer, solicitation or recommendation to buy or sell.