Free Forex Article

U.S. Dollar Regains on Risk Aversion as Stocks Weaken

The greenback regained its ground on Friday in Asia on renewed risk aversion after the fall in the DJIA to 2002 lows. The Nikkei closed near a four-month low with the TOPIX near a 25-year low and the New Zealand stock market fell to almost a five year low. The losses in equities were led by financial stocks and triggered renewed safe haven buying of the USD and selling of JPY crosses. EUR/USD which had hit highs in NY around 1.2760, opened in Asia under 1.2700 and proceeded to fall to lows of 1.2576. AUD/USD which had seen highs of 0.6523 in NY, opened around 0.6450 to fall to lows of 0.6375. A similar pattern emerged for sterling, which fell from 1.4447 NY highs to lows of 1.4210. USD/JPY, supported by USD weakness, was however, capped by the JPY cross sales, and maintained a tight range of 93.96-94.22 in Asia due to the two-way flows. Despite the size of the moves, trading was fairly moderate according to dealers and currencies such as AUD and GBP, at least for now, are still in their current range. Oil eased slightly after the strong 14% rally in NY on Thursday while gold eased slightly, extending the losses seen Thursday.