Currencies

The Fed cut the target rate and the discount rate by 50 basis points last night. The Dow rallied 336 points. The US dollar fell to a record low. Gold surged to a 27-year high. Oil surged to a record high. The Aussie jumped US2c.

Increasingly bellicose rhetoric from Dick Cheney with respect to Iran helped to push oil and gold higher last night as Wall Street awaited the Fed.

The Dow reversed a 100 point fall on Friday as poor economic data cheered a market hoping for a big rate cut.

Good news from McDonald’s and GM pushed the Dow higher in light trade while the financial sector also benefited from some positive developments.

Wall Street range traded last night as oil and wheat posted record highs and the dollar fell to an all time low against the euro. The I-word is back.

The Dow put on 180 points last night as Bernanke said nothing in Europe, the US dollar weakened, gold surged, and oil hit an all time high.

As investors factor in rate cuts in the US foreign exchange markets are re-pricing accordingly with the US dollar weakening and the Australian currency being supported by interest rate differentials.

Wall Street was unsure just what clues were provided by various Fed statements last night, while a Japanese recession looks more clear.

The market was expecting payrolls to rise by 110,000 in August. The real number came as a big shock.

A big surge in the gold price saw Comex futures close over the magic US$700/oz level while Middle East tensions and low inventories sent oil ever higher. The Dow closed modestly higher.