USD/CAD 1.0649 EUR/CAD 1.3451 USD/JPY 83.79
GBP/USD 1.5465 EUR/USD 1.2697 USD/CHF 1.0339
Commentary:
The game of chicken has as speculators test the resolve of Japanese authorities to stem the Yen's steady rise by pushing the Yen to a 15-year high against the USD and a nine-year peak against the Euro. The Yen rise accelerated as stop-loss sales were triggered in euro/yen at around 107 yen while traders cited macro hedge-fund selling of the Euro against the USD. Falling equity markets also helped to push the Yen on the crosses while narrowing differentials between U.S. Treasuries and Japanese government bond yields dragged the USD down against the Yen. Japanese Finance Minister Yoshihiko Noda declined to comment on the chance of currency intervention, saying only that recent currency moves were one-sided and disorderly moves could harm the stability of the economy and financial system. Traders took those comments as a sign the authorities were not yet ready to act to curb Yen strength. Yesterday's news that Prime Minister Naoto Kan and Bank of Japan Governor Masaaki Shirakawa discussed the Yen by phone, but Kan did not ask the central bank to ease monetary policy further, and the two did not touch on currency intervention gave the speculators the green light. Japan hasn't intervened in currency markets in more than five years after selling ¥35 trillion in the 15 months through March 2004. In Europe, the Euro continued to weaken despite the fact that second-quarter German gross domestic product data confirmed that the strongest quarterly growth in 20 years came on the back of booming exports. Today's action just goes to show you how the market is on pins and needles ahead of Friday's reading on Q3 US GDP. Keep in mind that with little economic news around the world trading activity remains light as the summer holiday season slowly comes to an end. In Canada, the CAD fell to a seven week low after Canadian retail sales data came in weaker than expected. Also putting pressure on the CAD was fading risk appetite as investors are getting increasingly worried that the global recovery has run its course.
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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