USD/CAD 1.0267 EUR/CAD 1.4092 USD/JPY 83.30
GBP/USD 1.5833 EUR/USD 1.3733 USD/CHF 0.9769
Commentary:
The Euro rose broadly on Friday as the market continues to price in QE2.0 by the Fed. With the beginning of the fourth quarter, Asian central banks were busy rebalancing their books by selling USDs and moving into other currencies such as the Euro. Euro gains accelerated after breaking above option barriers at the 1.37 level. Today's price performance in the Euro has set off technical signals that opens up the door to more gains ahead. The disappointing euro zone manufacturing purchasing managers' index (PMI) for September and euro zone unemployment for September did not deter market players from buying the Euro, which only reinforces that the key driver continues to be the Fed possible implementation of QE2.0. Meanwhile, the GBP was lower versus the Euro as UK manufacturing dropped more than expected in September, but this didn't hold it back versus the USD. In Asia, the Chinese continue to pull the global economy away from a double dip as Chinese manufacturing surged in September. The purchasing managers' index rose to 53.8, its highest level since May, up from 51.7 in August and beating expectations of a reading of 52. Meanwhile, the Yen continued to edge higher against the USD prompting comments from Japanese authorities. Japanese Prime Minister Naoto Kan said on Friday the government would keep taking decisive action to curb the Yen's rise as needed and urged the central bank to take further necessary steps to end deflation. Japanese Finance Minister Yoshihiko Noda also chimed in with his pledge to continue to take decisive steps on currency moves when necessary. In the U.S., the USD accelerated its losses against the Euro on Friday this morning after New York Federal Reserve Bank President William Dudley said more Fed action is warranted unless the U.S. economic outlook improves. In Canada, the CAD continued to edge higher after data showed U.S. consumer spending rose slightly more than market expectations, which added to earlier support generated by firm gold prices and higher oil prices. The CAD continues to lag the action against the other major currencies on lowered market expectations the Bank of Canada will hike rates in October. The index for overnight swaps is now pricing in an 89% chance that the BOC will hold rates steady at its October 19th policy meeting after comments made yesterday by Bank of Canada Governor Mark Carney. He said record high Canadian household-debt levels and a soft U.S. export market mean modest economic growth for Canada in the months ahead, suggesting that further interest rate hikes would likely be delayed.
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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