Monday, 18 Jan 2010

Safe-Haven Currencies May Gain Prominence This Week

Today's thin trading has failed to create any substantial market movements as of this afternoon. Since we will not be experiencing the opening of the US markets due to the observance of Martin Luther King Jr. Day, trading is expected to remain flat until tomorrow morning.

Asian stocks were trading lower this morning, with the Japanese Yen gaining against many of its counterparts as a result. In other areas, many market participants were buying up US Dollars in expectation that risk appetite is going to decrease from the stream of negative releases witnessed so far this month. The drop in American retail sales in December did not help this sentiment either.

Without a proper boost to consumer confidence, there is a chance that safe-haven currencies like the USD and JPY may gain in significance in the days ahead. This will likewise put a damper on the prospects of raising interest rates by the middle of 2010. Recovery is on the way, but it seems to be slow in the making.