Asian Market Update
- The Indonesian Central Bank said that SE Asian Central banks will soon discuss the falling USD. USD/Asia showed little reaction to the comments, trading higher on local stock market gains. In related news, Japanese Finance Minister Nukaga said that G7 nations are staying in contact over currencies, adding that fiscal and monetary policy needs coordination.
- The BBC reported that Bank of England governor King indicated for the first time that he is willing to provide more support to U.K. banks. King made the comment at a meeting with bank leaders held yesterday. “Although the governor of the bank…asked them not to divulge what they discussed, I have learned he signaled - for the first time - that he was sympathetic to their request that in an emergency they should be able to swap a wider range of assets, including their mortgages, for loans from the Bank of England,” said BBC business editor Robert Peston. Another bank source said: “The banks want a level playing field between British banks, continental European banks and American banks. The British central bank has done far less than its counterparts to address the issue of liquidity and the money markets and has a much tighter definition of the collateral that it will accept.”
- Forex: The USD held steady in a quiet session, with EUR/USD currently trading near levels seen at the end of the New York session. USD/JPY saw some selling early on, but bids at 99.00 supported the pair. For EUR/USD, chartists see support in the 1.5395-1.5405 area, with next support seen down at 1.5375. GBP/USD held steady in Asia, despite concerns over the health of U.K. credit markets. GBP/USD support is seen near 1.9800.
- Bank of Japan leadership update: Outgoing governor Fukui has appointed Shirakawa to be acting governor. The central bank is to meet on March 21 to select a chairman, expected to be Shirakawa.
