USD/CAD 1.0254 EUR/CAD 1.3777 USD/JPY 84.48
GBP/USD 1.5654 EUR/USD 1.3416 USD/CHF 0.9873
Commentary:
The USD fell to the lowest level in six months and through its 50-day moving average versus a basket of currencies on speculation the Federal Reserve’s willingness to ease monetary policy further will devalue the level of the USD. The Fed said yesterday that they “will provide additional accommodation if needed” to spur growth, effectively lowering the bar for more quantitative easing and the market is just following the path of least resistance in selling the USD lower. Quantitative easing essentially involves buying U.S. Treasuries or bonds and flooding the market with greenbacks or in plain English it is a fancy term for money printing. In Europe, the Euro shot up on the Fed's decision and on news that Portugal was able to sell 750 million euros of bonds on top of yesterday successful bond actions in Spain and Ireland. In Asia, the Yen moved higher as traders tested the resolve of Japanese authorities. Yen intervention is unlikely today due to the markets being closed tomorrow in Japan. The central bank is monitoring the Yen’s strength, which is an impediment to the nation’s economic recovery, a Bank of Japan board member, Ryuzo Miyao, said today. He also said the bank plans to take appropriate credit-easing steps if needed. Also in an interview with the Financial Times, Prime Minister Naoto Kan said Japan should put in place economic and monetary policies to weaken the Yen. Many traders expect Japan to step in between 83.00 and 85.00 yen. They said the authorities had called banks to ask if they will be staffed on Thursday, a Japanese national holiday, in an apparent attempt to keep traders cautious over intervention. In Canada, the CAD hit a six-week high in overnight trading but gave back most of those gains after domestic data showed retail sales fell unexpectedly in July. Total retail sales edged 0.1% lower in the month, dragged down by a sharp decline in purchases of home furnishings, which overshadowed a rise in car sales. The CAD has lagged the moves of other currencies against the USD due to the interconnectivity of the U.S. and Canadian economies.
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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