USD/CAD 1.0614 EUR/CAD 1.3521 USD/JPY 84.97
GBP/USD 1.5488 EUR/USD 1.2714 USD/CHF 1.0245
Commentary:
The Yen dipped against the USD and the Euro on Friday as speculators remained nervous about possible intervention by Japanese authorities. Prime Minister Naoto Kan said he would take firm action on currencies when needed and that he would meet Bank of Japan Governor Masaaki Shirakawa when the central bank chief returns from the U.S. Fed's annual retreat in Jackson Hole, Wyoming. Meanwhile in the U.K., the GBP drifted lower as today's economic data reinforced a weakened outlook for future growth. The preliminary Q2 GDP report showed economic activity in the U.K. expanded 1.2% compared to Q1 amid an initial forecast for a 1.1% rise in the growth rate, while private consumption increased 0.7%, which exceeded expectations for a 0.5% advance. However, gross fixed capital formations unexpectedly slipped 2.4% in the second-quarter, with business investments falling 1.6%, while exports advanced 1.1%, which fell short of expectations for a 2.1% rise. The Euro was little changed against the USD, but the single-currency is likely to face increased volatility throughout the day given the slew of U.S. event risks that’s lined up for Friday’s trade. The preliminary Q2 GDP reading for the world’s largest economy is anticipated to show a sharp downward revision, with market participants forecasting the growth rate to expand at an annualized pace of 1.4% versus an advanced ready of 2.4%. Shortly later at 10am EST, Fed Chairman Ben Bernanke is scheduled to speak in Jackson Hole regarding the economic outlook for the U.S., and comments from the central bank head is likely to move the currency market as investors weigh the prospects for future policy. Traders have been divided between attempting to trade on rising global risk aversion versus concerns about the potential for looser U.S. monetary policy. Fears about global growth tend to produce supportive, safe-haven flows into the dollar. Concerns the Fed will move to further loosen policy and boost its quantitative-easing efforts are negative for the USD. In Canada, the CAD was a touch softer versus the USD as the market awaits Bernanke's speech and the revised GDP number. Also weighing on the CAD, Canadian Finance Minister Jim Flaherty, speaking in Ireland yesterday, said the struggling U.S. economy is a big concern for Canada, adding that Canadian economic growth likely eased in Q2.
Disclaimer: Please note that any currency rates/prices contained in this document are indicative, and subject to change without notice. Prices quoted may vary substantially based upon the size of transaction and market volatility.
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