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erik2966 30-11-2009 15:09

Dubai's problem!!!
News that a property development arm of Dubai World requested to delay its payments triggered sharp volatility across the financial markets. The story actually broke on the eve of November 25 th and on the 26 th , currency traders began to flock into the safety of U.S. dollars. The demand for dollars was so strong that the euro hit an intraday low of 1.4829 when the European markets opened. The price action in USD/JPY tells us that risk aversion was the primary driver of the forex markets as USD/JPY fell to a 14 year low when the Asian markets opened last night. However the selling did not continue into the U.S. trading session. The limited number of U.S. traders at work today sold rather than bought dollars which suggests that not everyone believes that the Dubai news will have global ramifications. Whether this is true or not remains to be seen but whenever there is a situation where traders are unsure about how the political or economic environment will pan out, such as Dubai's woes, they always sell first and ask questions later. As a result, the USD and JPY were the biggest beneficiaries.

magister 30-11-2009 16:51

I think we will recover, unless some other problems come to light.

gillybabe 30-11-2009 16:56

Woohoo - look at gj go today - hope it will continue its fall down to 135/136 today

iglyx 01-12-2009 18:45

Notice that reaction to these news was happened on a THIN market (Arabic/US holidays), that why it happened to be bought back so quickly. On a normal market the whole thing would be much less volatile and this story would have attracted less attention. Dubai's debt is huge, but everyone knows perfectly that it WILL be bailed out in any circumstances.

PapiaKhatunAsha 27-10-2020 21:24

Re: Dubai's problem!!!
What I think is that trading forex is always risky as there no strategy word properly even due to broker scam it's really tough to make continuous money so if possible try to avoid this market.

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