Stock Market Analysis 10/14/10

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Meanwhile, the British pound was 0.6 percent firmer at $1.5980, just shy of its earlier eight-month high of $1.6066, while the Australian dollar was close to breaking parity with the U.S. dollar for the first time in 28 years. It earlier traded as close as $0.9993.

The dollar was also down 0.4 percent against the Japanese yen, to 81.47 yen, following its earlier fall to a fresh 15-year low of 80.94 yen.

The yen is now within touching distance of its post-World War II low against the dollar of 79.75 yen, which will do nothing to lift the mood among Japan’s export-heavy business executives, who have voiced their worries about the export-sapping appreciation of the currency.

As a result, the markets are on the lookout for another intervention from the Bank of Japan — last month it bought dollars and sold yen directly for the first time in six years to stem the tide.

“If the intervention policy is to regain its credibility they cannot really afford to let this rate crack 80 yen too soon,” said Daragh Maher, deputy head of global FX strategy at Credit Agricole.

Earlier in Japan, stocks joined in the global rally and the benchmark Nikkei 225 stock index jumped 180 points, or 1.9 percent, to 9,583.51.

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