The dollar and Asian stocks | Forexgen

The U.S. dollar rose broadly on Monday, hitting a two-year high against sterling, as tumbling oil and gold prices left investors scurrying to buy back the currency and sparked a rebound in Asian stocks.
A rally in the dollar stalled last week after hitting a six-month high against the euro, but an upward trend in the U.S. currency is seen intact.
Recent reports showing shrinking or no economic growth in Britain, the euro zone and Japan have boosted the attraction of the dollar as an alternative investment, especially with crude prices trading at around USD 114 barrel, USD 33 below a record high hit in July.
Even billionaire investor and long-time dollar detractor Warren Buffett, chairman of conglomerate Berkshire Hathaway Inc, came to the currency's aid on Friday when he said in a television interview that he had no bets against the dollar.
Asian stocks rebounded from a two-year low as the drop in oil prices lifted exporter shares.
Japan's Nikkei share average jumped about 2 %, with shares of Honda Motor Co leading the way higher.

Currencies weekly Expectation by ForexGen

The Sterling (GBP) suffered more than most currencies as Oil losses combined with downgraded data. Q2 GDP was revised down to 0.0% from 0.1% initially forecast. Support was finally found pre 1.8500. Overall the GDP/USD traded with a low of 1.8503 and a high of 1.8780 before closing the day at 1.8520 in the New York session. Looking Ahead, Bank Holiday in UK today. UPDATE GDP/USD BREAKS 1.8500 dropping quickly to 1.8425.

The Australian Dollar (AUD) fell in line with the pullback in

commodity prices. AUD was also under pressure from a wide range of currencies as the market pared longs especially against the AUD/NZD. The Aussie has consolidated between the .8600-.8800 levels against the Greenback. Overall the AUD/USD traded with a low of 0.8649 and a high of 0.8804 before closing the US session at 0.8780.

Gold (XAU) positive stocks and heavy losses in Oil set the tone with the precious metal falling over $10 an ounce. Overall trading with a low of USD$821 and high of USD$838 before ending the New York session at USD$823 an ounce.

US Stocks Rally Taking Dollar For The Ride| ForexGen

U.S. Dollar Trading (USD) rallied before Fed Chief Bernanke's speech on speculation that Lehman Brother's may receive capital from the Korean Development Bank. Also supporting was a massive drop in Oil on the back of easing geopolitical concerns and reopening of major pipelines in Turkey. Bernanke took some of the wind out of the Dollar's rally though with comments that slowing US growth would mediate inflation concerns indicating that the Fed would be able to keep target rates low for an extended period of time. In the U.S. share markets, the NASDAQ was up 34 points (1.44%) and the Dow Jones was up 197 points (1.73%). Crude Oil closed down $6.59 ending the New York session at $114.59 per barrel. Looking ahead, July Home Sales are forecast at 4.9 Million up from 4.86 Million in June.

The Euro (EUR) pulled back from Thursday's highs as Oil retreated and the USD rallied broadly. Eurozone data did little to support with the June Current Account blowing out to -8.2 Billion. Industrial Orders for June were better than forecast although still negative, down -0.3% in June or -7.4% Y/Y. Overall the EUR/USD traded with a low of 1.4759 and a high of 1.4909 before closing the day at 1.4790 in the New York session.

The Japanese Yen (JPY) reversed Thursday's losses gaining all day to reclaim the 110 level driven by buoyant equities and renewed risk appetite. Monetary Policy Minutes showed Bank of Japans concern with rising global Inflation and growing downside risks. Overall the USDJPY traded with a low of 108.33 and a high of 110.15 before closing the day around 109.90 in the New York session.