The dollar and yen bubbles continue to deflate as global financial markets extend their recoveries. Commodities, currencies and equities are all on firmer footing after a fresh round of rate cuts from China, the US , Taiwan and Norway today and another round expected from the BOJ on Friday and the ECB and BOE next week.
The despair that gripped the markets in recent weeks and prompted panic buying of dollars and yen is lifting as equities rebound and drag other asset classes along for the ride. Now the trades taken in anticipation of further asset carnage are having to be scrapped in double quick time.
Asian shares are on fire and regional currencies are recovering strongly after the Fed swap lines extended to South Korea and Singapore late Wednesday afternoon.
EUR/JPY is close to 130.00 as we write, up from 113.60 on Monday! EUR/USD is at 1.3160. Next reesistance is 1.3260, the Oct 10 spike low.
