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Dubai's problem!!!

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  #1  
Old 30-11-2009, 15:09
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Default 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.
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  #2  
Old 30-11-2009, 16:51
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I think we will recover, unless some other problems come to light.
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  #3  
Old 30-11-2009, 16:56
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Woohoo - look at gj go today - hope it will continue its fall down to 135/136 today
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  #4  
Old 01-12-2009, 18:45
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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.
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