USD/CAD 1.0301 EUR/CAD 1.3241 USD/JPY 84.04
GBP/USD 1.5434 EUR/USD 1.2835 USD/CHF 1.0183
Commentary:
Risk on - all of the safe haven plays, the USD, Yen, and the CHF, except gold, have been falling since trading opened in Asia due to new global banking regulations and upbeat Chinese data. China's industrial production and retail sales surpassed analyst expectations for the month of August. Additionally, new loans topped $500 billion and it seems China’s economic performance is on track to register nearly 9.5% on the fiscal year, despite government efforts to clamp down on bank lending and property speculation. The Chinese Renminbi hit its post-revaluation high against the USD. Meanwhile, the outcome from this weekend’s Basel III meeting aiming to prevent any repeat of the international credit crisis, agreed on Sunday to force banks to more than triple the amount of top-quality capital they must hold in reserve. But to ease the burden, regulators gave the banks 8 years to comply. This is godsend to the banks, especially the German banks, which in turn propelled the Euro higher by more than 1% against the USD. The increase in risk appetite lead to flows into AUD, NZD, and the GBP. In Asia, the Yen fell broadly, though it rose against the USD, keeping alive jitters about whether Japanese authorities may step in to curb Yen gains before a party leadership vote on Tuesday in which Prime Minister Naoto Kan is being challenged by powerbroker Ichiro Ozawa. A victory by Ozawa would be a negative for the Yen because he is backing currency intervention while a Kan victory would be neutral on the Yen. I would expect some short covering in the Yen today ahead of the vote. In Canada, the CAD moved higher along with the risk on trade as the improved outlook on the global economy spurred on the commodities trade.
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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