Forex Investment and Currency Trading

Reports of a government plan to take illiquid assets off the balance of US financial institutions gave US equity markets and carry currencies a significant boost yesterday afternoon. The same theme has dominated trading in Aisa and Europe this morning. Equity markets throughout the Asian region have recovered strongly and US equity futures have spent much of the day pushing higher. This has seen the carry currencies continue to recover, with AUD/JPY up 2%, while NZD/JPY is up close to 1% (although this follows a 3% gain through the northern hemisphere session yesterday. AUD has also been stronger against the USD, trading to a high of 0.8280. The NZD has underperformed but has been well supported on dips towards the 0.6700 figure level. This has seen the AUD/NZD cross recover some ground and trade back through the 1.2000 level. Elsewhere the USD has generally been firmer with EUR/USD falling below 1.4200, while JPY and CHF have both given up over 1% against the USD in line with the move lower in risk aversion.