Wall Street- Forex markets breathe some relief
After six days of sharp declines, the European markets opened higher on Thursday, just one day after the world central banks joined in an effort to cut borrowing costs. Forex trading felt some ease.
Although the instability can still be sense in the forex markets, Traders have a clearer path for trading, at least for today. The Down Jones rose 1.5 percent –more than 130 points- while the Standard & Poor stock was up 1.3 percent.
Thursday trading opened to a much calmer market than on Wednesday, which included a 200-points-lower swing. The Down Jones hit the 189.01 points mark. The most venturous traders are already trading away; despise the general sense of the global economy.
“We´re getting a relief rally”, said Howard Wheeldon, senior strategist at BGC Partners in London, “but nothing has changed, all eyes remain on credit market conditions.”
Investors and traders of the forex market woke up to better news after I.B.M. reported greater earnings than expected by Wall Street. The company´s net income increased to 22 percent, or 3 cents higher than expected.
After the huge Wall Street crisis that left hundreds unemployed, the Labor Department reported initial claims for jobless benefits dropped 20,000. Forex traders know they cannot rely on one day`s indicator, but still there´s a general sense of relief.
However the credit markets remain tight and the Treasury Department is considering a plan to take ownership on many U.S. banks to try to rescue the financial system.
In the European trading market, the DJ euro rose 1.6 percent, while London´s FYSE 100 index in London rose 1.7 percent. Paris showed a 2.6 percent rose in the CAC-40, while the Dax in Frankfurt rose 1.8 percent. All these indicators have the Forex market gaining a certain level of confidence, however, traders know they have to watch out for sudden switches in the world`s economy to better pair up currencies.
One day after similar actions had taken place in different parts of the world, central banks in Taiwan and South Korea cut their rates by 0.25 pints. Honk Kong authorities did the same by a half point to 2 percent.
Russian trading markets had decided to suspend until next Monday, following the severe pressure, but then the market regulator ordered to keep the markets open. The Russian currency has suffered one of the biggest looses against the dollar, showing a current exchange rate of 26.118.
Banks stocks showed as bigger gainers in Europe. Royal Bank gained 18 percent, USB rose 7.2 percent. Deutsche Bank caught up a 7.5 percent and Sociéte Générale rose 5.8 percent.
Euro rose to$1.3755 from $1.3656 on Wednesday in New York, while the British pound rose to $1.7342.
As economies around the world are buying a significant amount of dollars and lowering their rates to aloud the currency´s circulation on the street, the Forex market starts to feel a general feeling of improvement, although there´s still a lot of work to come before bringing the financial world into stability.
