Forex Investment and Currency Trading

EURUSD opened lower in Asia but rebounded sharply on broad USD weakness as risk appetites were stoked by positive results from Intel. The chipmaker said its business was recovering quickly from the recession with revenues down only 8% YoY in Q3, compared to 15% and 26% declines in Q2 and Q1. Further good news came from Australia – the Westpac consumer confidence index rose 1.7% to 121.4 in October – and also from China: imports contraction slowed to 3.5% YoY in September from 17.0% the previous month, beating the market forecasts for a 15.0% fall; exports also fell much less than expected. The dollar extended its losses after Chinese banks extended 516.7 bln yuan of new loans in September and forex reserves rose USD 141 bln in Q3 to USD 2.27 trillion. Optimism regarding the recovery has once again boosted demand for high yielding commodity currencies, and the USD was sold off against most of the majors, with EURUSD making new highs for the year near 1.4915. The release of weaker than expected EMU industrial production had little impact.