Bernanke’s Speech Causes Late Sell Off |September 9, 2011

The Australian equity market is set to drop about half a percent on the open after a weak overnight lead from the US after Federal Reserve Chairman Ben Bernanke’s comments failed to calm investor fears over the state of the economy.

The Dow dropped 119.05 points to close at 11295.81 while the S&P500 index ended down 12.72 points to finish the session at 1185.90. The market was relatively calm until Bernanke’s speech where he gave no additional insight into the central bank’s plans to support the economy which he will outlay at the FOMC meeting on September 22.

The EURUSD (see above chart) fell the most in a month from highs of 1.4095 to as low as 1.3873 as the ECB President Jean Claude Trichet said that the downside risks in the region have intensified, dampening the outlook for interest rate increases.

GBPUSD rallied from eight week lows of 1.5913 to as high as 1.6083 after the BoE kept rates unchanged and fended off calls to increase its asset purchase program to boost the economy.

USDCHF traded up from lows of 0.8626 to as high as 0.8769 as investors look elsewhere for a safe haven asset.

Gold futures traded up from lows 1826 to as high 1869 after the US jobless claims rose unexpectedly by 2,000 to 414,000. One analyst surveyed was quoted saying things are not looking positive around the world at the moment and during times like this demand for the precious metal as a safe haven increases.
WTI oil traded off slightly off overnight after it surged 3.9 percent yesterday, at one stage in the session it was trading as high as 1 percent up through the 90.25 level.
Last Traded
SPI 200 future 4169
S&P500 Index 1185.90
Dow Jones 11295.81
FTSE 100 Index 5340.38

Last Traded
Gold 1869.28
Oil (Nymex) 88.56

Last Traded
AUDUSD 1.0575
EURUSD 1.3885
GBPUSD 1.5960
USDJPY 77.51
Bloomberg, Dow Jones News