Global Recession Threatens To Hit &Nbsp; Financial Predators Warn

On Thursday (September 22nd), the US dollar jumped and the currencies of commodity exporters fell. After the Federal Reserve declared yesterday that the US economy was facing a "significant downside risk", the market worried about the global economy. increase Stall.

The US dollar index climbed to a seven month high, as the Federal Reserve announced that it had worried about the global economy going to recession, and the fluctuation of exchange rate increased sharply to 16 month high. After the announcement of the PMI and the euro area service industry and the manufacturing industry, the euro reached a 10 year low against Japanese yen.

Michael Woolfolk, chief currency strategist at Bank of New York Mellon Corp in New York, New York, said: "we are seeing a disproportionate amount of capital buying US dollars, because as a shelter, the dollar is indeed the only option. Investors have come to realize that the deterioration of the outlook for the group of seven G7 will generate new markets. negative Impact. "

The US dollar index rose 1.5% to 78.49, hitting 78.79 of its highest position since February 14th. The US dollar rose 0.9% to 1.3449 against the euro, hitting 1.3385 of its value since January 19th, and the Japanese yen rose 1.1% to 102.58 against the euro, hitting the highest 102.22 since June 2001, and the Japanese yen rose 0.3% to 76.26 against the US dollar.

The JPMorgan Chase report showed that the implied volatility of the G7 countries rose to 15.56, the highest level since May 2010. In addition, the euro's yen volatility jumped to 19.53 in a month, the highest since June 2010.

European and American stock markets all suffered heavy losses, while the pan European blue chip 300 index closed down 4.6%, a 26 month closing low, while Europe's three major stock indexes also tumbled by about 5%. Fall over 3%.

In its monetary policy statement yesterday, the Fed announced a "twist operation" plan to buy long debt and sell short debt, which will buy 400 billion US long term bonds and sell the same amount of short-term securities.

Greg Anderson, chief currency strategist at Citigroup Inc in New York, said: "the volatility of the global economy is worrying. The market expected the fed to make miracles to turn the tide, but this is not the case, so it is time to make a price reset for all financial assets. In panic, people usually buy dollars to avoid risks.

The Fed will also reinvest its home loan maturity bonds to mortgage securities to replace Treasury bonds. The Federal Open Market Committee claims that the action "will bring downward pressure on long-term interest rates and help to make the broader fiscal situation more lenient."

Chris Huddleston, a London based dealer at Investec Bank Plc, said: "the market is rushing into the US dollar, the stock market is selling, and a lot of risky assets are being abandoned by investors." Huddleston managers have assets of about $95 billion.