Forex Markets Gap Against U.S. Dollar on Geithner’s $1 Trillion Plan

Currency markets gapped down against the U.S. Dollar over the weekend after U.S. Treasury Secretary Tim Geithner announced a vague, yet promising, plan that is intended on stabilizing financial markets. The plan, would create a government sponsored enterprise called the “Public Investment Corp.” Geithner is set to spend as much as $1 trillion on loans and to buy toxic assets from ailing banks.

Optimism surrounding the announcement initiated a greenback sell-off as risk-appetite gained momentum on the news. Futures on the S&P 500 are pointing towards an equity buying spree tomorrow; currently the June 2009 contract is up 0.694%, or 5.30 points.

AUDUSD gapped up 38 pips over the weekend from a close of 0.6857 on Friday to 0.6895 during today's open.

EURUSD gapped up 57 pips over the weekend from a close of 1.3563 on Friday to 1.3620 during today's open.

GBPUSD gapped up 26 pips over the weekend from a close of 1.4440 on Friday to 1.4466 during today's open.

USDJPY gapped down 32 pips over the weekend from a close of 95.89 on Friday to 95.57 during today's open.

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