Global uncertainty drives down gains in markets

to weaken the yen from its post-World War II high.
That sent the yen tumbling as much as 4,7 percent against the dollar and failed to increase volatility.
According to market analysts, the yen still remains one of the favourite currencies as Japan still has a strong trade surplus and benefits from global risk aversion.

The surplus the broadest measure of trade means Japan doesn’t rely on foreign capital to finance budget deficits.
The Japanese yen can be used as a funding currency in and around Asia as Japanese companies can use their currency to buy growth in these countries.
The yen has strengthened by 1 percent to trade at 77,17 against the dollar. At the moment we are seeing a yen rally and could strengthen further to 77 to the dollar and even beat that mark. It rose 0,3 percent to 106,05 to the euro after it had depreciated by 0,6 percent after that move by the Bank of Japan.

The intervention by the Bank of Japan saw a lot of growth related currencies taking a knock.
For all the weakness in the economy, the yen still remains attractive to traders.
In Europe the introduction of Mario Draghi as the new European Commercial Bank president saw him cut interest rate by 25 basis points from 1,5 percent to 1,25 percent, a move market watchers believe was well-timed.

Investor concern about Italy’s ability to cut the region’s second debt has heightened pushing the euro between gains and losses against the dollar and yen.
As in the past few weeks headline news has been causing swings in the euro either to the downside or upside.

The euro inched lower amid the flow of rather bad news out of Europe. The 17-nation currency gained to trade US$1,3751 and fell to 106,05 yen.
Concern that Europe’s sovereign-debt crisis will spread and global economic growth is slowing has increased bets for haven currencies like the yen and the Swiss franc.
As long as Europe is in this situation growth related currencies will forced to trade within certain ranges.
South African market

The instability in Europe combined with Moody’s downgrading of South Africa’s sovereign debt last Thursday sent the rand tumbling.
South Africa’s rand declined by 0,4 percent to trade at 7,9529 per dollar and rose by 1,2 percent to trade at 10,8830 against the euro.
The rand moves in tandem with the euro since it is South Africa’s biggest trade partner with 45 percent of their exports being sold in Europe.

The global slowdown trims demand for most of South Africa’s exports and affects their exchange rate regime.
Commodities market

All eyes remain on the European situation for any markets that involve risk and that could push investors to return to commodities as volatility takes centre stage.
Gold continued with its gains as demand for the yellow metal increased as traders still perceive it as the safest asset.

The bullion gained by 1,9 percent to US$1 788,50 an ounce and continues to attract inflows of around US$492 million in intra-day trades around the globe.
I hope investors holding bullion units with Tetrad Investments are buying into the rally.
Crude oil rose by 4,8 percent to US$98,99 per barrel on Iraqi and Libyan political issues.