The main theme of the foreign exchange market on Monday is still the unwinding of carry trades amid subprime woes.
The euro weakened further against the dollar and yen after the European Central Bank lent money to banks for a third day. The ECB injected 47.67 billion euros into the region’s banking system today to ease credit concern. The euro failed to break through the 1.37 handle and slid back to test 1.36 versus the dollar. The single currency remained in the low range just above the key psychological level at 160 against the yen.
It is still not clear how deep the subprime crisis is going to spread. As a safe-haven currency, the greenback is favored in rising risk aversion. Also, the yen gained versus high-yielding currencies, such as the euro, sterling, and aussie, as those short yen positions are squeezed.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment