Collective Sigh Of Relief As Rick Aversion Subsides - causing the USD to give back some of yesterday's gains, but safe haven flows continued to flow towards the CHF and gold. The Yen was higher against the USD and stands about one Yen away from its all-time high back in 1995 as Japan's nuclear crisis could trigger more Yen demand as Japanese insurers and companies may repatriate funds to help pay claims and reconstruction costs. Gains in the Yen have been capped as speculation is rampant that the Bank of Japan will intervene to stem Yen gains. In fact, traders have said that the BOJ was seen checking rates on currencies with banks in Tokyo. In Europe, the Euro was repelled from the 1.40 level after Moody’s Investors Service cut Portugal's rating by two notches to A3 from A1, putting its Portugal rating in line with Standard & Poor's. Meanwhile, the GBP was up after data showed that the number of people claiming jobless benefit fell by 10,200 last month, its biggest monthly drop since June. Gains in the GBP were quickly reversed after other data showed a rise in the British unemployment rate to 8% from 7.9% in the three months ending in January, as the total number of unemployed hit a level last seen in 1994. Elsewhere, safe haven flows continued into the CHF and gold and worked to lower the USD due to the ongoing uncertainty in the Middle East and North Africa. In Canada, the CAD was little changed from yesterday's close after recovering about half of its losses during Tuesday's wild ride. The currency should continue to be well bid as risk aversion subsides and on rising oil prices. Also helping the CAD was today's release of Canadian manufacturing sales, which were unexpectedly strong.
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