The Yen picked up steam on Wednesday as safe-haven flows returned to the Japanese currency after several sessions of lower trading. With the US Stress Test results due out later today, the Yen benefitted from the unease investors have with the Dollar and the overall US Economy.
At 11:10PM GMT, the Japanese Yen was trading up .52% to the US Dollar to 98.25, up .5% to the Swiss Franc to 86.82, down .1% to the Australian Dollar to 73.56 after a day of being up sharply and up .25% to the British Pound to 148.66.
USD
While there have been some signs that the US economic outlook is improving, there is also increased anxiety about what is considered to be “unknowns” in the economy such as the banking sector, the auto sector and the housing sector. In addition to the stress test results, a key unemployment report is due out on Friday as well as a revised housing report for April.
At 11:20PM GMT, the Dollar was trading down .02% to the Euro to 1.3326, down .27% to the Sterling to 1.5124, down .73% to the Canadian Dollar to 1.1664, down .85% to the Australian Dollar to .7485 and down .7% to the New Zealand Dollar to .5844.
The Dollar was down most of the day on Wednesday overall as safe-haven bids retreated due to investor confidence that the global recession is beginning to wane. The Dollar declined even further late in the day after minutes of the Federal Reserve's latest policy meeting showed the US central bank is considering an increase of its purchases of securities, a move that would further devalue the world's reserve currency. The concern with the meeting that most analysts had was that there are Fed members who believe that more toxic assets need to be purchased and that doing so will mean putting more dollars into an already flooded market.
At 11:30PM GMT, the Dollar was down 1% to the Euro to 1.3764, down 1.75% to the British Pound to 1.5746, down 1.21% to the Canadian Dollar to 1.141, down .01% to the Australian Dollar to .7744 and down .65% to the New Zealand Dollar to .6053. The Dollar also fell .9% to the Swiss Franc to 1.1008.
JPY
The Yen was mixed on Wednesday after a report was released that showed Japan's economy had shrunk by a record 4 percent in the first quarter. The steep decline resulted from cuts in exports and investments that companies had made. However, Bank of Japan economists announced that they foresee a return to modest growth in the coming quarters even as the longer-term outlook remains unclear. The fall in GDP was the largest in more than 50 years, however it was less than the 4.2 percent drop that analysts predicted and came on the heels of a similarly bleak revised 3.8 percent contraction in the previous three months.
At 11:45 GMT, the Yen was up 1.25% to the US Dollar to 94.75, up .3% to the Euro to 130.52, down .6% to the British Pound to 149.25, up 1.26% tot he Australian Dollar to 73.39 and up .5% to the Swiss Franc to 86.06.
In other Daily FX news...
The British pound continued its trek upwards Wednesday after Finance Minister Alistair Darling, told a London paper that the UK economy will see a return to growth by the end of 2009. Mr. Darling said he would not refine his predictions for a 3.5% fall in GDP this year and a 1.25% growth in 2010.
Moody’s, one of the major credit rating agencies affirmed the Dollars “AAA” status “despite rising national debt” on Wednesday, sending the Dollar higher against most majors as credit worries eased. Also, on Wednesday, a regional Federal Reserve president had said that the Chinese informed him they were “concerned” over the US’s rising debt in a meeting held last week. Richard Fisher of the Dallas Federal Reserve in Texas said the primary concern of the Chinese is the Federal Reserve, the US’s Central Bank, financing spending by the treasury department which essentially amounts to printing money. While China is worried about hyperinflation, analysts agree that at this time the US economy is slightly deflated.
However, data released late in the session in online forex market showed that the inventory of unsold homes had increased in the US, stoking fears that home prices will continue to fall next month. The news dropped the dollar off of its highs and moved it negative against the Sterling.
At 11:45PM GMT, the Dollar was up .8% to the Euro to 1.3874, up .25% to the Japanese Yen to 95.26, down .45 to the British Pound to 1.5985, up .3% to the Canadian Dollar to 1.1194, up .5% to the Swiss Franc to 1.089 and up .1.13% to the Australian Dollar to .7775.
EUR
A European Central Bank governor, Erkki Liikannen, said on Wednesday that interest rates could fall further if economic conditions worsen. This turned the Euro negative on the day against many currencies as investors feared the currency’s valuation was worsening. Analysts have said that the 1.40 mark on the EUR/USD has been a stubborn ceiling and that this time around, if the data continues to come out negative, the Euro could have a hard time climbing back towards that level.
At 12:05AM GMT in Daily FX, the Euro was down .5% to the Yen to 131.78, down .3% to the Sterling to .866, down .1% to the Canadian Dollar to 1.5523, and down .1% to the Australian Dollar to 1.7822.
Re: 50 pips daily !
Hybrid Mode
