Forex Today: Asian Stocks Lower

Although analysts seem to increasingly believe the middle east war will be contained, Asian stock markets make solid declines as the week opens.

1. Last week’s market ended on a risk-off note, with funds flowing into safe havens, partly on fears that the war between Israel and Hamas could expand. However, this week’s markets have seen small declines in have assets such as the US Dollar and Gold. US stock market futures were also a bit higher, but fully open stock markets in Asia have fallen quite firmly. The Nikkei 225 Index is down by more than 2%, while the HSI is also lower.
2. Yesterday’s election in New Zealand saw a change of government, as the ruling Liberals of the last 6 years were voted out in place of a right-wing government. The New Zealand Dollar has gained as a response and is today the strongest major currency in the Forex market over the short-term, while the US Dollar is the weakest.
3. The war in the Middle East remains essentially contained to Gaza and Israel, although there have been minor clashes between Israel and Hezbollah on the Lebanese border.
4. Trend traders in the Forex market will be most interested in being long USD/JPY which has continued to strengthen.
5. There will be a release later today of US Empire State Manufacturing Index data.
6. There will be releases tomorrow of New Zealand CPI (inflation) data and the Reserve Bank of Australia’s Monetary Policy Meeting Minutes.