The GBP is STERLING today - the GBP surged after the U.K. economy grew at double the pace forecast by economists in the third quarter and the nation’s credit outlook was raised at Standard & Poor’s damping concern the Bank of England will restart its bond-purchase program next month to boost the economy. GDP rose 0.8% in Q3, the Office for National Statistics said in London today. Also supporting the GBP was news that S&P, which affirmed its AAA rating on U.K. debt, today restored its outlook to “stable” from “negative” after saying in May last year that Britain was at risk of a downgrade. Right next door, SEK was the second biggest mover as the SEK fell after Sweden's central bank, the Riksbank, increased the main rate by a quarter percentage point to 1% today as expected but said future rate hikes would be more gradual than previously expected. In Asia, the Yen fell against the Euro and USD after Japan's finance minister Yoshihiko Noda warned the government would "act decisively" in currency markets if needed. Japan’s Vice Finance Minister Fumihiko Igarashi said yesterday that currency-market intervention is most effective when it’s unexpected - wow what a short memory he has, did they surprise the market on September 15 with their intervention and today the Yen is 5% stronger. Yesterday's decision by Japan to make 1.5 trillion yen ($18.5 billion) from its foreign-exchange special account available to Japan Bank for International Cooperation for overseas investment and infrastructure projects could be construed by some as indirect intervention. Meanwhile, the USD rebounded from yesterday lows as investors are wary of pushing it lower due to some uncertainty about what easing measures the Federal Reserve may take next week. The Fed is keeping the market off balance by having different reporters speculated on the size of the QE 2.0 so that shorting the USD is a bit less of a one-way bet. Last night it was New York Fed President William Dudley's turn to keep the market off balance by saying the Fed could provide "essential" support to the U.S. economy, although it was uncertain whether an incremental or big bang approach to asset purchases was better. In Canada, the CAD was down for the first time in three days on lower commodity prices as the USD was up across the board. The main event for the CAD this week will be Friday's Q3 GDP report.
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