USD/CAD 1.0147 EUR/CAD 1.4085 USD/JPY 83.21
GBP/USD 1.5885 EUR/USD 1.3861 USD/CHF 0.9647
Commentary:
I could start this commentary by saying the Yen did so and so overnight followed by the Euro did this and that overnight but with the advent of " Quantitative Easing" (QE) I think I will start the commentary by saying the USD is down across the board. Yesterday the central bank of Australia surprised the market by not raising interest rates, while the Bank of Japan decided to turn on the monetary spigots by cutting rates to zero. Lets go back a day earlier to Monday, the central bank of South Korea announced that it was going to audit banks foreign exchange transactions and the government of Brazil announced that it was doubling the tax on foreign purchases of Brazilian bonds to 4% in order to slow the accent of its currency. The end result of all these moves is that the domestic currency initially weakened against the USD. Fast forward to today and every one of those currencies as completely regained their losses and them sum, in fact the Yen is higher then its post intervention level. What gives? QE is the fancy term that central bankers came up with to describe their money printing operation. By calling QE it makes Joe Six-pack think that they are doing something complex. The prospect of the Fed's planned QE program, to be announced in early November, has been driving the USD lower. Yesterday's BOJ announcement of their QE program has open up the door to any and all central banks to QE the race to devalue is on. Today Fitch downgraded Ireland and the Euro shed some 30 pips only to recover them and then some as the expectations of further QE from the Fed trumps the negative news for the Euro. In Canada, the CAD climbed to a two-month high on, you guessed it, growing expectations that the U.S. Fed will further ease monetary policy. The aftermath of the BOJ's move has given the green light to the Fed to do more, which is helping the flow of funds into commodity and equity markets. The overnight interbank swap market is indicating that the Bank of Canada will not raise interest rates on October 19, but who cares because QE is negating this negative news for the CAD.
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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