The JPY and USD are very marginally firmer in lacklustre Asian trade, EUR/USD down at 1.3910 from a North American close Friday around 1.3940, while EUR/JPY is down at 133.60 from around 134.20. Risk aversion in the currency markets has been ratcheted up a notch, but it’s certainly nothing major at this juncture. Elsewhere Asian stockmarkets made gains overnight.
The World Bank says the global recession this year will be deeper than it predicted back in March and warns that a flight of capital from developing nations will swell the ranks of the poor and unemployed.
Meanwhile geopolitical developments will be weighing on sentiment a little, what with the protester deaths in Iran over the weekend, and with President Obama saying the US military is “fully ready” should North Korea launch a missile toward Hawaii.
The travails of California will be hovering over the markets as well with Moody’s recently warning it may cut the State’s credit rating if Governor Schwarzenegger doesn’t act quickly to cut the State’s budget deficit.
