Market Review June 19 2012
The G20 leaders focused their response to Europe’s financial crisis on stabilizing the region’s banks, raising pressure on German Chancellor Angela Merkel to expand rescue measures as contagion engulfed Spain.
American exporters from Dow Chemical Co. to Hewlett-Packard Co. are preparing for a further decline in demand from Europe as the region’s deepening debt crisis threatens to derail a source of strength for the U.S. economy.
Greek election winner Antonius Samaras begins a second day of talks to form a coalition after holding “constructive” meetings with two party leaders, racing to forge a government that keeps bailout aid flowing.
Central banks rebuilding foreign- exchange reserves at the fastest pace since 2004 are crowding out private investors seeking U.S. dollars, boosting demand even as the Federal Reserve considers printing more currency.
Warren Buffett, whose prediction last year of a housing recovery was premature, is raising his bet on a rebound with his $3.85 billion bid for a mortgage business and loan portfolio from bankrupt Residential Capital LLC.
The dollar slid against the euro and yen before the Federal Reserve begins a meeting amid prospects policy makers will consider taking further steps to spur growth in the U.S. economy.
Canada’s dollar dropped against its U.S. counterpart on concern data this week will show growth in the world’s 10th-largest economy is slowing.
Euro Dollar:
EURUSD (1.2609) lost its momentum overnight and dipped to trade at 1.2609 as investors began to focus on the growing problems in Spain and the huge amount of money needed to bailout the country as well as the banking system. Continued worries about the global recovery remain in focus as the EU contagion is effecting every corner of the globe.
The Great British Pound
GBPUSD (1.5688) The sterling, fell yesterday after the announcement of a joint effort between George Osborne and the BoE to offer monetary stimulus to help the ailing economy. Markets are expecting the BoE to inject money into the economy at this week’s meeting.
Asian –Pacific Currency
USDJPY (78.98) The USD gained some momentum in this morning’s session, but with the FOMC meetings today and tomorrow and the G20 on going, investors are sitting tight.
Gold
Gold (1629.55) dipped as it spent most of the day bouncing up and down looking for direction as investors worried about the effects Mr. Bernanke will have when he speaks this week and what policy he will introduce.
Crude Oil
Crude Oil (83.49) prices floundered, dipping slightly, but staying within range, the stronger USD pulled down some of the value, and worries over the global slowdown and a continued fall in demand pressure the markets.
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