The Japanese yen climbed today against most major currencies as signs of global economic slowdown made investors seek safety, sending stocks and commodities down together with currencies related to growth.
German unemployment climbed 21,000 last month, much more than was predicted by analysts. The International Monetary Fund revised China’s growth for this year from 8 percent to 7.75 percent. The forecast was no completely bad as the agency promised that growth will accelerate in the second half of the year, but it was not good either.
Markets reacted negatively to the news. The Standard & Poor’s 500 Index of shares fell 0.7 percent and the S&P GSCI Index of commodities tumbled as much as 1.2 percent. The yen gained strength amid nervousness and uncertainty among traders.
Canadian Dollar Stronger After Last Carney’s BoC Meeting
May 29th, 2013 at 21:52
Some Canadian dollar billsThe Canadian dollar jumped today against its US counterpart and trimmed losses versus the euro after the policy meeting of the Canadian central bank. At the same time, the currency declined against the Japanese yen.
Mark Carney led his last meeting as Bank of Canada President and made no surprise moves. The main interest rate remained at 1 percent. Such decision was expected by Forex market participants.
US dollar is down against most of its major counterparts on what many consider profit taking right now. With Forex traders preparing to reposition themselves in light of the next round of economic data and predictions for central bank movements, it is little surprise that some profit taking is happening.
Greenback is lower today as Forex traders appear to be repositioning themselves and taking profits. The dollar index is lower, as the greenback is down against the Japanese yen, euro, and UK pound.
Right now, many Forex traders are pondering the effects of rising Treasury yields, as well as concerns about the latest economic news out of Europe. There is also speculation that the Federal Reserve is preparing to pull back its asset purchase program, reducing the quantitative easing program that has been in effect for years.
UK pound is getting a small boost against the US dollar today, thanks to some support from the latest CBI sales data. While the help is rather small, it’s a little bit of a boost nonetheless. UK pound isn’t expected to make any big moves anytime soon against any currency.
The latest CBI sales data indicates an improvement for the month of May, and that is providing the pound with a little bit of help against the US dollar today. Overall, though, the economic data isn’t expected to have a huge impact on sterling’s performance. Additionally, speeches from two Bank of England members aren’t supposed to have much impact on the UK pound, either.
Instead, many Forex traders will be waiting for further indications of economic improvement, and there is a sense of waiting on the BOE for what’s next. Outgoing Bank of Canada head Mark Carney is expected to take over as governor soon, and many are waiting to see what effect his leadership has on BOE policy and the pound going forward.
The Malaysian ringgit fell today as speculations about an end to US Federal Reserve’s quantitative easing continued to eat away risk appetite, spooking investors from riskier currencies.
Last week’s comments of Fed board members suggested that reduction of stimulus is indeed probable. Such possibility was undermining strength of higher-yielding currencies and continued to do so today. Yesterday’s positive data from the United States increased chances for tighter monetary policy.
The Thai baht weakened today after the central bank eased its monetary policy on concerns about slowing economic growth.
The Bank of Thailand cut its main interest rate by 0.25 percentage point to 2.5 percent. Such decision was expected by market analysts. The bank voiced worries about economic slowdown:
The Thai economy in the first quarter of this year grew less than expected from tepid domestic demand, which could weigh on overall economic momentum particularly if there was delay in government’s infrastructure investment expected to start later this year.
USD/THB went up from 30.0850 to 30.2350 as of 10:18 GMT today.
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