Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news the currency wars raged with a vengeance overnight.
US Federal Reserve Chairman Ben Bernanke said overnight he was ready to buy more US Treasury bonds, setting in stone expectations the Fed will unleash a second round of quantitative easing (QE II) or money printing from its November 3 meeting, shortly after mid-term elections.
This talk dragged the US dollar lower against most currencies, including the New Zealand dollar, which rose towards 75 USc in early trade.
The gold price jumped to a fresh record high of US$1,342/oz and the oil price rose to nearly US$83/barrel as investors repriced the commodities to take account of a deavluing US dollar.
Meanwhile in Asia, the Bank of Japan cut its official rate to 0% and announced plans to buy US$60 billion worth of bonds in its own fresh round of money printing. This is sparking fears of competitive devaluations by those countries trying to fire up their economies with lower currencies. The Dow rose 200 points before a slight dip in late trade saw it close up 180 points, although it was virtually unchanged when measured in Gold or Euro or Oil terms.
Those emerging economies with higher interest rates that are vulnerable to capital flight from the devaluing Northern Hemisphere economies are moving to protect themselves.
Brazil announced overnight it would double its tax on foreign investments in Brazilian bonds to 4%. South Korea announced plans for new capital controls and Taiwan's central bank intervened to push its currency down.
The Reserve Bank of Australia surprised many by holding its Official Rate at 4.5%, no doubt in part as it fears a rise in the Australian dollar towards parity vs the US dollar.
Meanwhile in Europe, Societe Generale rogue trader Jerome Kerviel was sentenced to 3 years in prison and to repay 4.9 billion euros in losses suffered by his bank. He was found guilty of forgery and unauthorised computer use.
(Updated to include links and Daily Exchange Rate)
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