USD/CAD 1.0126 EUR/CAD 1.4183 USD/JPY 82.25
GBP/USD 1.5987 EUR/USD 1.3987 USD/CHF 0.9634
Commentary:
USD selling has been nonstop. We are in a full fledge currency war. Why? It is a matter of national security, I'm not kidding. It is all about GDP. Every country in trying to protect or increase their share of global GDP, because if you start to lose market share of global GDP that means that you are losing jobs which in turn puts people in the streets. This is a big fear for government around the world. Look at the riots and demonstrations that have occurred around the world. Countries are desperate to stop this from happening and right now the weapon of choice in currency devaluation. Devaluations come in many forms. In China and other Asian countries it takes the form of a currency peg versus the USD; in other countries it takes the form of currency controls like the one just announced in Brazil in the form of taxation to foreign money entering the country; and it other countries like the U.S., UK, and Japan it is in the form of quantitative easing. This is the current driver in the currency markets right now. Now on to the daily noise, the AUD surged to a 27-year high against the USD after surprisingly strong jobs data revived talk of a Reserve Bank rate hike. Meanwhile the GBP rose and breached the 1.60 handle on better than expected manufacturing output. In monetary policy meeting, both the Bank of England and the ECB left rates unchanged and markets are waiting for the policy statements. Elsewhere, yesterday's weak ADP report in the U.S. spurred speculation that the Fed may increase the size of QE and the possibility that the Fed does not wait until the November policy meeting to begin implementing its QE program. In Asia, the Yen moved higher against the USD on prospects that Japan will avoid intervention before this week’s meeting of finance ministers and central bankers from the Group of Seven industrialized nations. This was reaffirmed when Vice Finance Minister Fumihiko Igarashi said "Japan won’t weaken the Yen to become more competitive with other countries in trade, and any currency intervention would be aimed at restraining excessive moves." In Canada, the CAD sold off after domestic building permits plunged in August, well below market expectations. Canadian Finance Minister Jim Flaherty told reporters in Ottawa countries are concerned that measures being taken around the globe to weaken currencies are distorting markets and 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.
No comments:
Post a Comment