Daily Fundamental Analysis August 24th

By: Hillel Fuld
Both the USD and the EUR increased in value vs. the yen in Monday’s Asian market as Asian shares peaked the risk appetite of investors' and caused increased purchasing of risk-sensitive units.

The USD showed promise vs. all the major currencies Monday, making a comeback from a pattern of recent declines, which were a direct result of remarks by Federal Reserve Chairman Ben Bernanke regarding the leveling out of the economy.

The JPY will most probably continue to weaken if the share markets rise, as the safe-haven reputation means it is less appealing when investors seek higher returns.

The Euro increased against the greenback on Friday as the European data provided even more legitimacy to the opinions that the region is on the path to recovery and that it might happen faster than expected.

The British pound pushed ahead, a result of positive news elsewhere in the world. The sterling on the other hand, took a beating earlier this week after the Bank of England revealed some policy makers had wanted to increase quantitative easing as early as this month.

An increase in risk appetite swept through Asia's trading session Monday, sending the Australian dollar sharply higher and bond futures lower across the yield curve, with similar momentum expected in the offshore session. Sparking the swing in appetite were better-than-expected U.S. housing data and remarks by Federal Reserve Chairman Ben Bernanke that the outlook for the world's largest economy is improving.