Euro-Yen initially fell sharply 110.60 from 111.15 as investors unwound their long positions during the early hours of Tokyo trading. The market however turned around 360 degrees and buying interest came back quickly and thus pushing the rates back higher to 111.25 toward the European opening hours. The FX market is stabilizing and Asian stocks have rallied upbeat on the post-effects of the better-than-expected US Durable Goods yesterday and on speculation that Ben Bernanke may present plans on a possible third round of Quantitative Easing by the Fed to buy substantial amounts of bonds and provide stimulus to the U.S. economy and alleviate liquidity fears in the global markets. The Wall St Journal however, said that the Fed Chief Ben Bernanke is unlikely to unveil new efforts to bolster the U.S. economy despite the high anticipation of the market for a QE3 program. Bernanke is scheduled to speak at the Central Bankers conference in Jackson Hole, Wyoming tomorrow Aug 26th. The first part of the meeting begins today. Andreas Dombret (Bundesbank board member) said that the ECB stands ready to ease tensions in US dollar funding of European Banks if they arise. “If need be, the ECB stands ready to mitigate potential bottlenecks, based on the swap agreement with the Fed.” Gold fell $109.00 (5.9%) from 1850.00 to the intraday low of 1741.00 yesterday on shifting interest back to the equities market and yield based paper assets. Silver on a similar move fell $2.60 (6.2%) from 42.00 to test 39.40. Dollar-Yen rebounds to 77.15 from 76.85 while Sterling Yen rebounds to the 126.30 resistance from 125.70.

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