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DENVER, CO, USA - GALACTIC FX DAILY MARKET UPDATE
SUMMARY
Volatility remains the order of the day. The dollar fell well over 10 yen
against the Japanese currency once again last night. The dollar remains
pressured as rumor of problems with hedge funds exposes the US financial
system. Equity markets in Europe and the US are substantially lower on the
day.
ASIA
The dollar fell to 15 month lows against the Japanese Yen last night. The
exchange rate fell to a low of 111.63 before finding some relief in rumors
that central banks were checking rates in FX markets.
Talk is growing of a massive restructuring for Japanese banks.
Progress in this area is aiding the yen as it is necessary for the banks to
rebuild capital before funds can be made available for future growth of
Japanese firms.
EUROPE
The Bank of England's Monetary Policy Committee lowered it's key
repo rate to 7.25%. The MPC said the cut was sparked by a deterioration in
the international environment which has led to a decline in business and
consumer confidence.
The Bundesbank declined comment of rumors of intervention.
Bundesbank member Koebnick said that no dollar support was planned. Most
European equity markets are off near 3% in today's trade.
AMERICAS
US jobless claims rose to 300k in the Oct 3 week from 289k the week
before US hedge funds are once again under fire. Speculation is that more
weakness among this sector will lead to concerns on the overall health of
the US financial industry. The dollar struggles are based on concerns over
the impact to the US economy from global instability. Speculation of
further interest rate cuts, as early as later this year, is leading investor
interest away from the dollar and US based assets.
The DJIA opens down nearly 100 points. 30 year bond yields are
rising, currently above 4.90%.
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