Archived IMT (2008.10.06)

Stocks sell off to 5-year lows interrupted by a series of intra-day rallies resulting from talk of an emergency G8 meeting. AUDJPY plunged 13% to a 5-year low. Yen longs are once again urged from any Fed action on interest rates, which could give a short term but powerful boost to yen pairs. AUD awaits the Reserve Bank of Australia decision (11.30 pm EST) widely expected to produce a 25-bp rate cut to 6.75%, but a 50-bps rate cut carries heightened possibility, in which case would re-accelerate further lows in the currency. AUDJPY lows stand at 70 yen, but whipsaws from rumors and central bank action may lift the pair to as high as 74 yen. GBPUSD capped at $1.7580.