By TraderVox.com
Tradervox.com (Dublin) – Safety remained diminished in the market as signs of improvement in China and speculation of progress in the euro region increased the demand for riskier assets. The US dollar and the Japanese currency were weakened against most peers as commodity related currencies increased in demand. The increased risk demand came prior to European Union meeting this week. The leaders are expected to discuss measures that will help contain the fiscal turmoil in the region. The yen and dollar were lower against the Australian dollar after falling last week following the release of economic data in China, which showed improvement in exports.
According to Janu Chan, an Sydney-based economist at St. George Bank Ltd, euro region sentiment have improved following speculation that EU Summit will come up with solutions to the crisis in Greece and Spain. In addition, Janu pointed out that following the stronger than-expected Chinese export data, investors are confident that the slowdown in Chinese economy is stabilizing. The yen and dollar remained down as the EU leaders meet in Brussels on October 18-19. During the weekend, international finance chiefs signaled signs of improvement and confidence in the firewall put in place to deal with the crisis in Europe. The IMF had indicated that the world is on the verge of recession if the US and Europe does do not do more to improve their economies.
China’s Custom Administration released a report on October 13 indicating that overseas shipments rose by 9.9 percent last month from a year earlier. The market was expecting a 5.5 percent increase. The market is now turning its focus on the October 18 release of Chinese third-quarter growth data. The US dollar started the week at $1.2949 per euro at the start of trading in Tokyo yesterday after it fell by 0.2 percent to $1.2951 on Friday last week. The greenback was trading at 78.45 against the yen. The Japanese currency was exchanging at 101.56 yen per euro after it fell by 0.3 percent on Friday to trade at 101.61.
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