USD/CAD 1.0233 EUR/CAD 1.3821 USD/JPY 84.20
GBP/USD 1.5848 EUR/USD 1.3487 USD/CHF 0.9831
Commentary:
The Euro has given up some of last week's gains on speculation European banks will need more capital. Firstly, Moody's cut Anglo Irish Bank's senior unsecured debt by three notches to Baa3, just one notch above junk status, and its subordinated debt by six notches to Caa1. Irish Finance Minister Brian Lenihan, who said Sept. 22 that costs to bail out Anglo Irish will be “manageable” at 22 billion euros is scheduled to publish the latest estimates by Oct. 1. The market wants clarity because the number has been revised several times and some speculate that it is closed in 35 billion euros, equal to 20% of Ireland’s gross domestic product. Secondly, Germany's Der Spiegel reported the European Commission lacks confidence in the viability of German regional lenders. Apparently, the EU is checking whether the financial help received by the German regional lenders WestLB AG and HSH Nordbank AG is compatible with European law citing a letter from the institution to Germany’s deputy finance minister, Joerg Asmussen. Market players will be cautious ahead of this weeks repayment of 225 billion euros in European Central Bank loans. In Asia, the Yen remained above the 84 handle as selling by Japanese exporters and institutional investors ahead of the fiscal half-year end was offset by wariness of more yen-selling intervention by Japan. The USD did briefly spike up on Friday on rumours of Yen intervention, but Prime Minister Naoto Kan said he was unaware of any new market intervention. And of course we received some more verbal intervention today with comments from Bank of Japan Governor Masaaki Shirakawa, when he said the central bank would examine the impact of the Yen's rise at its policy-setting meeting next week and was watching forex moves with great interest. In Canada, the CAD firmed versus the USD on higher oil and gold prices. The rush to hard assets is on with market players piling into the precious metal, oil, and other commodities in part on the possibility of further quantitative easing by the U.S. Federal Reserve to stimulate growth. Bank of Canada governor Mark Carney tried to pour cold water on the recent appreciation in the CAD on a CNBC interview on Friday, expressing greater concern about sluggish U.S. growth and low levels of inflation opening the door wider to pumping more dollars into the economy.
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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