Aussie, Euro Slide Headed into European Session Open
Asian Session Summary
The major currencies were lower across the board by the end of the Asian session, offsetting optimism accumulated at the end of the North American session yesterday. Despite the fact that U.S. equity markets were off over 3 percent from their session high within 2-hours of the close, both the Dow Jones Industrial Average and S&P 500 were able to post positive days on Thursday. With higher volume and a sharp rally into the close, there was small hope that the rally could continue through Asia, setting the tone for a positive day to end the month and the quarter.
Disappointingly, price action did not show that same follow through during the first part of trading on Friday. Asian equities dropped for the first time in four days. The MSCI Asia Pacific, the regional benchmark, ended the day down 0.7 percent, finishing the month down 9.3 percent, and the quarter down 16 percent. That marked the worst quarterly performance since the fourth quarter of 2008.
EUR/USD 1-minute Chart: September 30, 2011
Charts created using Strategy Trader– Prepared by Christopher Vecchio
The shift back to risk-aversion in spite of yesterday’s late day price action weighed heavily on the Australian Dollar and other risk-correlated assets. Similarly, the Euro and the New Zealand Dollar were among the worst performing currencies on the day. Despite the decisive vote by the German parliament to expand the scope of the European Financial Stability Facility yesterday, concerns remain over the ability of European leaders to pull the continent back from the brink. Considering how markets have reacted as the sovereign debt crisis has developed, further delay will continue to weigh on sentiment and boost volatility in the coming weeks.
24-Hour Price Action
Key Levels: 08:00 GMT
Written by Christopher Vecchio, Currency Analyst
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