USD/CAD 1.0340 EUR/CAD 1.3501 USD/JPY 85.78
GBP/USD 1.5563 EUR/USD 1.3038 USD/CHF 1.0075
Commentary:
The USD is mostly lower across the board, except against the GBP and the Yen. With Japan's market closed for a holiday, the USD stayed within a tight range versus the Yen - the threat of more intervention keep it above 85.50 and aggressive hedging by Japanese exports keep it under 85.80. In the UK, the GBP slid on evidence of weakness in Britain’s housing market. Home sellers’ average asking prices in England and Wales decreased 1.1% in September from the previous month, according to data from Rightmove Plc, the operator of Britain’s biggest property website, adding to concern the economy may slip back into a recession. Also, Bank of England data showed lending to businesses fell for the fifth month in July but at its slowest pace in almost a year. Separately, the Bank said M4 broad money supply fell by 0.2% on the month in August. Meanwhile, the Euro forged ahead despite continued strains in the European bond market. Ireland and Portugal will be selling bonds this week and it looks like they will be paying a record interest rate spread over German bonds, which is fanning speculation that both countries will seeking IMF support. All eyes are on tomorrow's FOMC meeting. The market is expecting interest rates to remain on hold for an extended period of time, but the market will be looking for clues on the need to inject more stimulus into the struggling U.S. economy by way of the Fed's balance sheet. I don't think the Fed will announce any new programs but I do expect them to downgrade the outlook on the economy, which would be a precondition to any new measures - which would be seen as USD negative. In Canada, the CAD was slightly firmer from Friday's close. Statistics Canada reports Canadian bonds again accounted for the majority of foreign inflows, which demonstrates that yield has been the main driver in this latest rally in the CAD. Canada’s benchmark two-year bond yields were little changed today at 1.48%. Two-year U.S. Treasuries yielded 0.47%. The gap has expanded on speculation the Bank of Canada may keep raising interest rates while the Fed holds its target rate unchanged.
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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