FX Overnight Briefing

Financial News - US & Far East

- Stocks down on consumer confidence
- USD fell after weak data
- Quiet day in Asia with U.S. out today
- Oil above USD 95.00

Today's Main Events

- CHF: Retail sales
- USD: Public holiday

American Timezone:

Stocks down on consumer confidence

Most U.S. stocks dropped for the second day, paring a weekly advance, after consumer confidence fell to a 16-year low and manufacturing in New York unexpectedly contracted for the first time since 2005. Benchmark indexes pared declines and financial shares erased an earlier drop as traders speculated Bear Stearns Cos. Will receive a takeover bid. European stocks dropped and Asia's benchmark rose. Intel Corp., the world's largest chipmaker, led declines in all 18 companies in an S&P index of semiconductor shares on concern weaker consumer sentiment will diminish demand. Energy companies fell the most in seven days.

USD fell after weak data

USD had its biggest weekly loss this year against EUR as a decline in New York manufacturing and tumbling consumer confidence added to concern that the U.S. economy is headed for a recession.

Oil declined

Crude oil fell from a five-week high on speculation U.S. demand will drop after a report showed that consumer confidence slumped to the lowest level since 1992.

Far East Timezone:

Quiet day in Asia with U.S out today

The dollar steadied against the yen and the euro on Monday as many investors stayed on the sidelines ahead of U.S. data this week to await further clues on the health of the economy.

Concern about more fallout from credit market turmoil and bigger losses at financial firms continued weighing on the U.S. currency. But traders said the dollar was finding some support on gains in Asian stock markets as well as hopes that the Federal Reserve's rate cuts and the newly enacted fiscal stimulus package could rekindle U.S. economic growth later this year.

The dollar slid on Friday when U.S. reports revived fears that the economy was slipping into a recession, keeping intact expectations for more Federal Reserve interest rate cuts. Traders said the dollar's continuing weakness was more visible in its moves against higheryielding currencies such as the Australian dollar. The Aussie climbed to a three-month high against the dollar, boosted by its strong yield advantage and expectations for a further interest rate rise in March from the current 7.00 %.

Stocks up despite negative close from U.S Friday

Asian investors shrugged off a rash of weak economic indicators on Monday to pick up stocks that looked like weathering a downturn, while oil and metals kept close to record prices as supply concerns continued to bite. MSCI's measure of Asia Pacific stocks excluding Japan was up 0.6 percent by 0200 GMT but is still down nearly 10 % so far this year.

Japan's Nikkei average was up 1.3 %, but came back after lunch break in Tokyo to around 0,4 %.

Oil over USD 95.00

Oil hovered above USD 95 a barrel on Monday, as investors weighed the effects of a slowing U.S. economy against an escalating row between OPEC member Venezuela and oil major Exxon Mobil.

U.S. light crude for March delivery fell 27 cents to USD 95.23 a barrel by 0113 GMT. Oil closed 4 cents higher at USD 95.50 on Friday, after touching a one-month high of USD 96.67. London Brent crude fell 10 cents to USD 94.53.

Jyske Markets - FX Research