Forex News and Events:
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The yen weakened for a second day against the dollar and the euro as the tightness in risk proxies extended on the news from the weekend that the Japanese government is looking to offer public funds to non financial firms. We saw the EUR rallied more than 100 pips from its low. The yen declined to 89.93 against the dollar as of 7:42 a.m. in London from 89.10 late yesterday in New York. Japan's currency weakened to 119.22 per euro from 117.51. AUDJPY considered as the barometer of risk, rallied 70 pips. DXY hit an 8 day low and the Nikkei rallied 5.5%.
Today the EUR is expected to rally to 1.3450 even if the German IFO indicator is expected to show that the euro zone situation is still frightening, the business confidence index is expected to fall to 81.0, the lowest since the metric was introduced in 1991.
US consumer confidence data are released today, if the consensus view a deterioration of it, we could probably see a rebound due to lower mortgage rates and first effects of the fiscal support package.
The RBNZ will probably cut rates by 125bps during its meeting on Thursday (please note the announcement takes place on Wednesday 8 PM London time).
Finance Minister Bill English said that the economic outlook had deteriorated since the government’s December forecasts, and the economy now looked to be closer to the Treasury Department's “worst case scenario”, it suggested recession continuing through to 2010.
