The Japanese yen continued to grow against the other major currencies for a third day today even after the worse than expected GDP data was released in Japan, as the risk-aversion still remains popular in the markets. The euro weakened to the late November levels against the yen as the global stock markets demonstrated a drop. The markets are still under a strong influence of the Dubai’s debt problems and the new fiscal problems in Greece. Despite the optimistic statistics coming from the United States, other economies aren’t recovering as fast as expected.
Japanese GDP annual growth in the third quarter of 2009 was reported at 1.3 percent, down from 4.8 percent shown in the preliminary report and below the revised forecast of 2.8 percent. That’s a considerable decline in the recovery pace. During the economic downturns, investors and traders tend to buy the low-risk safe haven assets and sell the high-yielding one, switching from other currencies to the Japanese yen.
USD/JPY declined from 88.34 to 87.60 today; it closed at 90.52 last Friday. EUR/JPY went down from 129.91 to 129.36, reaching the lowest level since November 27 (128.77) earlier today. GBP/JPY fell from 143.71 to 142.80.

Pound down on weaker than EU outlook

The pound started the week down versus the euro and the U.S. dollar as sentiment towards other wealthy nations in the world remain more positive than the U.K.’s economic perspectives, forcing investors to abandon pound priced assets to inject capital in more attractive currencies backed by fast recovering nations.
After a Moody’s report featuring world’s wealthiest nations in which the U.K. was rated as "resilient" against better rating of its European neighbors, France and Germany, considered "resistant", the pound tumbled further versus the euro, and also went down versus the greenback as the interest rate outlook in the U.S. changed, with speculations suggesting hikes for the mid-term future, forming a winning pattern on the dollar charts versus most of the 16 main traded currencies. Despite the U.K.’s evidences of economic recovery, the process has been slower than the resilience perceived overseas, in emergent countries and commodity exporter nations like Canada or Australia, whose currencies have been gaining consistently versus the pound in 2009.
The outlook for the pound remains negative as investors opt for higher-yielding options in risk fueled sessions, and prefer to take safer bets in moments of strong risk aversion, leaving almost no appeal for pound-priced assets, which are likely to remain less attractive than average at least until the end of the year.
GBP/USD traded at 1.6335 as of 10:15 GMT from a previous rate of 1.6470 in the intraday. EUR/GBP traded at 0.9092 from a previous rate of 0.9042.

Dollar to Fall in 2010 on Record Low Interest Rates

The U.S. dollar touched its lowest level in more than a year versus most of its main rival currencies as speculations suggest that the Federal Reserve will maintain borrowing costs in a historic record low, as the economy still urges for stimulus to provide a more solid recovery.
Several reasons are impacting further the greenback’s outlook among traders in currency market, as risk appetite remains strong, favoring high-yielding currencies in commodity-linked and emergent countries, as well as the dollar has been losing its status as the world main reserve currency, with interest rates at an all time historic low, forcing most of the investors to avoid assets in the North American nation, and shift the nature of their portfolio towards risk and more interesting opportunities overseas, setting the dollar to a new record low in 2009 this week, extending a losing streak that stared in the very beginning of the present month.
The dollar forecast for 2010 tends to be rather negative, according to analysts, as the Federal Reserve has still not indicated that interest rates will be hiked anytime soon, fact which could add confidence and attract investors back to assets in the United States. To some extent, the U.S. government is being rather tolerant with its weakened currency, since they need to make their products more competitive to export markets, and consequently recover the economy in a faster pace.
EUR/USD traded at 1.5033 as of 15:15 GMT from a previous rate of 1.4973 yesterday. AUD/USD traded at 0.9317 from 0.9283.

Canadian Dollar Hits Record High on Global Growth

The Canadian currency traded at the highest level in almost a month after China posted a report indicating a sharpened growth, consequently favoring the loonie’s outlook due to Canada’s exporting economic profile, which is likely to be more favored than the U.S. in the short term of an economic recovery in global scale.
The loonie is extremely influenced by the sentiment in equities markets and demand for commodities, specially the crude oil, which rose today favoring the Canadian currency that touched the highest level since the Bank of Canada started to stress that a strong currency could cause a slowdown in the North American nation recovery two months ago, forcing artificially a severe losing streak for the Canadian dollar which traded near parity versus its U.S. counterpart before the BOC’s psychological interventions. The fact that China is posting positive figures for its economy also helped the loonie directly and indirectly, since the economic behavior of the Asian nation is highly considered among traders and has a strong power to drift markets sentiment.
Despite the Bank of Canada’s position against a strong loonie, risk appetite has been so intense, and decreased attractiveness for the greenback so deep, that traders are buying assets in Canada once again and betting on a strong loonie for the mid-term, as the world economy recovers increasing demand for Canadian commodities.
USD/CAD traded at 1.0458 as of 14:45 GMT from a previous rate of 1.0525 in the intraday. CAD/JPY traded at 85.89 from 84.77.

Brazilian Real Gains Sharply on Risk Demand

The Brazilian real had one of the best weeks in more than 2 months as demand for commodities and emergent markets assets rose globally, maintaining the real as the best performing currency in 2009 among the 16 main traded ones in foreign-exchange markets.
The real extended its gains this week flirting with the $1.70 level as risk appetite was strong during most of the previous 5 days, even if rising speculations that the national central bank will impose further measures to control the currency’s rally, following the implementation of a new tax for foreign capital invested in Brazilian stocks created last month.
USD/BRL closed the week 1.7193 from 1.7650 in the beginning of the week.

South African Rand Top Weekly Currency on Gold Rise

The South African rand was the best performing among 16 main traded currencies in foreign-exchange markets, as demand for metallic commodities exported from the African nation rose globally, increasing their rates and influencing positive the rand’s price and attractiveness.
This week gold and platinum, the biggest South African metal exports rose significantly as risk appetite reigned during most of the past five days, providing support for the rand to top the rank of best performers currencies, and causing the sharpest weekly rally in 3 months. Another positive point favoring the rand this week was a decline in foreign currency reserves growth, which could be interpreted as a neutral position from central bank policy makers regarding the current high levels of the rand. The South African rand is ranking among the top 5 best performing currencies in 2009, with other currencies from countries with similar profile as the South African nation, with high interest rates and a commodity export driven economy, such as the Australian dollar, and the Brazilian real.
Analysts affirm that the South African Reserve Bank position towards the rand’s strength is favorable for the currency to rally, as in other countries, like Canada, a strong currency is being highly unwelcome, which is affecting the Canadian dollar profile, differently from the rand, which still has a favorable scenario to grow further.
USD/ZAR closed the week at 7.54 after being traded to as high as 7.91 during the week.

The South African rand was the best performing among 16 main traded currencies in foreign-exchange markets, as demand for metallic commodities exported from the African nation rose globally, increasing their rates and influencing positive the rand’s price and attractiveness.
This week gold and platinum, the biggest South African metal exports rose significantly as risk appetite reigned during most of the past five days, providing support for the rand to top the rank of best performers currencies, and causing the sharpest weekly rally in 3 months. Another positive point favoring the rand this week was a decline in foreign currency reserves growth, which could be interpreted as a neutral position from central bank policy makers regarding the current high levels of the rand. The South African rand is ranking among the top 5 best performing currencies in 2009, with other currencies from countries with similar profile as the South African nation, with high interest rates and a commodity export driven economy, such as the Australian dollar, and the Brazilian real.
Analysts affirm that the South African Reserve Bank position towards the rand’s strength is favorable for the currency to rally, as in other countries, like Canada, a strong currency is being highly unwelcome, which is affecting the Canadian dollar profile, differently from the rand, which still has a favorable scenario to grow further.
USD/ZAR closed the week at 7.54 after being traded to as high as 7.91 during the week.

The South African rand was the best performing among 16 main traded currencies in foreign-exchange markets, as demand for metallic commodities exported from the African nation rose globally, increasing their rates and influencing positive the rand’s price and attractiveness.
This week gold and platinum, the biggest South African metal exports rose significantly as risk appetite reigned during most of the past five days, providing support for the rand to top the rank of best performers currencies, and causing the sharpest weekly rally in 3 months. Another positive point favoring the rand this week was a decline in foreign currency reserves growth, which could be interpreted as a neutral position from central bank policy makers regarding the current high levels of the rand. The South African rand is ranking among the top 5 best performing currencies in 2009, with other currencies from countries with similar profile as the South African nation, with high interest rates and a commodity export driven economy, such as the Australian dollar, and the Brazilian real.
Analysts affirm that the South African Reserve Bank position towards the rand’s strength is favorable for the currency to rally, as in other countries, like Canada, a strong currency is being highly unwelcome, which is affecting the Canadian dollar profile, differently from the rand, which still has a favorable scenario to grow further.
USD/ZAR closed the week at 7.54 after being traded to as high as 7.91 during the week.

Will the Pound Shrink with U.K.’s Economy?

The pound has been one of the biggest losers this year in foreign-exchange markets since several reasons, specially due to an artificial credit bubble that destabilized the British economy when the global slump crushed the world last year, forcing the pound down significantly, mainly versus the euro.
The Great Britain pound did not manage to perform well again this week in foreign-exchange markets due to a gross domestic report published this Friday that surprised analysts which forecast a timid, but important quarterly growth for the British economy, which was not confirmed, indicating that the United Kingdom remains in the worst recession in more than 50 years, shunning traders and investors from positions in the United Kingdom. British Isles economic outlook is more than a reason for the Bank of England to maintain its quantitative easing measures, which even if have not been enough effective, the situation could be worse if such measures would have not been taken, as a side effect for its asset-purchase program, the pound has been losing virtually every week in currency markets.
The GDP figures destroyed the improved sentiment towards the pound after Mervyn King’s comments suggesting that interest rates would be raised at some point, bringing back pessimism that the present economic situation in the United Kingdom remains complicated, forcing the pound down for another week.
GBP/USD closed this week at 1.6310 after touching 1.6693 before the GDP report.

Swedish Krona on Interest Rate Forecasts

The Swedish krona fell today after the national central bank maintained interest rates at a record low, indicating that the Nordic economic will require further stimulus to recover from the current recession.
Riksbank, the national banking institution of Sweden, not only left its benchmark interest rates unchanged but also declared that low levels will remain until next autumn, decreasing attractiveness for the krona since lower interest rates provide less profit opportunities for investors, consequently being the factor behind the krona’s fall today in currency markets.
EUR/SEK closed this Thursday at 10.23 from an opening rate of 10.31.

Bank of Canada Takes Measures to Force Loonie Down

After trading once again near parity with its U.S. counterpart, the Canadian dollar witnessed a significant fall today as the national central bank stated that a strong currency will cause problems and slow down the economic recovery in the country, shunning investors from Canada, at least, temporarily.
Bank of Canada held its overnight rates at 0.25 percent as most of economic analysts were expecting, but the tone of policy makers declarations was the main driver for a bearish day for the Canadian dollar, as, according to central bankers, a strong currency in Canada will impact directly and significantly the economic recovery in the country, forcing the loonie down versus most of 16 main traded currencies in foreign-exchange markets this Tuesday, as a number of traders are already expecting more effective measures from the Canadian central bank to halt its currency rally.
After trading at the highest level since July 2008, the loonie’s rally become an evident reason of concern for Canadian economic recovery, according to analysts. From now on, a dispute is likely to take place, as demand for Canadian commodities rise, forcing the loonie up, the national central bank is likely to find policies to halt the currency’s gains, as it will certainly slow down the recovery in the country.
USD/CAD traded at 1.0400 as of 13:42 GMT from a previous rate of 1.0280 yesterday. CAD/JPY traded at 86.88 as of 13:43 GMT from 88.25.

Euro Rally Concerns Central Bankers

The euro continued to remain near a 14-month high versus the dollar today, as concerns regarding the current strength of the European common currency start to emerge among ECB officials, since a strong euro could jeopardize economic recovery in its member countries.
A part from currencies based in commodity exporter countries like Brazil and Australia, the euro has been benefiting from the new wave of risk appetite that has been unleashed since signs that the global slump was ending emerged in the first semesters of the current year. Even if European Central Bank officials started to make concerned declarations regarding a strong euro and a weakened dollar, investors are still opting for the euro this week, as companies like Apple Inc. posted much higher profits for the past quarter than expected, making the euro-dollar pair to flirt with the $1.50 level.
As the euro continues to gain, versus the dollar and the pound specially, the European Central Bank may start to consider other effective measures to halt its currency strong rally, as declarations from policy bankers already show a certain degree of concern. According to analysts, market sentiment towards the euro will remain bullish, and it’s unlikely that a trend reversal could take place before the end of the year unless central bankers interventions would be taken.
EUR/USD traded at 1.4967 as of 13:18 GMT from a previous rate of 1.4918 yesterday. EUR/GBP declined to 0.9090 from 0.9130.

Canadian Dollar Near Parity With Greenback

Optimism and risk appetite ignite speculations that the Canadian dollar will soon trade in parity with its U.S. counterpart, as demand for Canadian exports are rising worldwide, as well as stocks in Toronto.
The Canadian dollar is once again trading near parity with its U.S. counterpart as the greenback suffers from a decreased attractiveness, while Canadian stocks rise, benefiting from rising crude oil prices, that is trading in the highest rate for 2009 this week, providing support for the loonie to gain before a Bank of Canada meeting tomorrow.
USD/CAD traded at 1.0286 as of 11:56 GMT from a previous rate of 1.0417 when markets opened yesterday.

Dollar Rebounds on Undervaluing Speculations

The U.S. dollar had a weak performance this week reaching record lows versus the euro and the Australian dollar but managed to pare some of its losses as traders could think the current devaluation may be too severe and that it would not reflect economic fundamentals in the U.S.
The greenback managed to gain versus most of the 16 main traded currencies towards the end of this week’s session, in a movement that many analysts considered to be a corrective, profit taking from a part of traders, but at the same time could indicate a shift in the dollar trends, as fundamentals in the country are not so negative as the sentiment towards the currency.
EUR/USD closed this week at 1.4904 after touching 1.4963 during the week.

Pound Declines Further on U.K. Economic Forecast

The pound touched the lowest level in more than six months versus the euro and posted declines versus virtually all main traded currencies as forecasts suggest that interest rates in the country will remain low in the long-term, adding doubts towards the British economic future.
The Center for Economics and Business Research in the U.K. impacted the pound outlook negatively today after statements indicating that interest rates will remain at record low levels until 2011 in the British Isles, followed by a timid increase afterward, decreasing attractiveness for the already weakened British currency, which has been one of the biggest losers in currency markets this year. The United Kingdom has been one of the least resilient wealthy countries this year, proving itself unable to cope efficiently with the challenges imposed by the global slump, consequently decreasing appeal for its currency among traders, and setting the pound to new record lows this week.
Forecasts released today by the CEBR added pessimism towards the future of the British economy, since record low interest rates mean in practical terms a longer period of economic downturns in the U.K., since interest rates are maintained low when a central bank attempts to stimulate loans to consequently reignite a country’s economy. The pound is likely to remain either neutral, or to extend its losses.
GBP/USD traded at 1.5801 as of 11:14 GMT from a previous rate of 1.5853 when markets opened yesterday. EUR/GBP touched 0.9338 from 0.9284.

Yen Falls on Industrial Optimism in Europe

The Japanese currency started this week falling versus most of the 16 main traded currencies after one of the main European electronics producer posted unexpected quarterly profits, inducing traders to opt for higher-yielding positions in foreign-exchange markets.
Royal Philips Electronics NV, the biggest European electronics producer based in the Netherlands, posted a better than expected profit for this year’s third quarter, surprising traders positively, damping demand for the safety of the yen, which dropped mainly versus currencies in emergent-markets like the Mexican peso, and high-yield commodity linked currencies like the Canadian and the Australian dollar, being the latter the best performing currency in traders markets in 2009 until this moment. The yen also lost versus the greenback influenced by the same factors, since the yen is considered the safest investment in currency markets, being impacted today by an increased risk appetite among traders.
Analysts were expecting the Dutch company to post losses, but the actual results surprised traders with optimism, provoking an exodus of capital from Japan towards riskier positions around the world, following the current trend of optimism caused by economic recovery evidences which have surged globally, specially this month as Australia was the first country to raise its national benchmark interest rates.
EUR/JPY traded at 133.24 as of 10:27 GMT from a previous rate of 132.18 when markets opened yesterday. AUD/JPY followed, trading at 81.72 from 81.22.

Global Recovery Signs Hurt Dollar

The U.S. dollar declined today against the euro and the other major currencies as the global economic recovery is looking more sound with the stock markets rising and the business/consumer confidence going up worldwide.
The drop of the U.S. currency’s rate against all other popular Forex currencies is going ahead of the monetary policy decisions that are scheduled for today by the Bank of England and the European Central Bank. The current growth the euro and the pound against the greenback could already include the optimistic statements from the central banks, which would mean a probable correction in case the announcements won’t be considered that optimistic later today.
The U.S. dollar fell to the 2-week low against the euro and to the 14-month low against the Australian dollar, which is currently benefiting from the positive interest rate decision carried out earlier this week. Analysts from the JPMorgan Securities say that there is a sense in the traders’ confidence in the fact that the crisis’ bottom is now behind. Considering a better prospect for the high-yielding assets and currencies, the dollar may remain in the downtrend for a longer period.
EUR/USD rose from 1.4687 to 1.4770 as of 9:28 GMT today — its highest value since September 24. AUD/USD went up from 0.8904 to 0.9041 — the highest level since August 8th, 2008. USD/JPY continued its decline today and decreased from 88.59 to 88.25.

G-7 Comments Set Australian Dollar High

The Australian dollar posted today its first gains after a rather bearish trend last week as the Group of 7 did not confirm speculations which suggested it would stress on the importance of a strong U.S. dollar to stabilize the world economy, favoring again high-yielding currencies.
The Australian dollar has been one of the best performing currencies this year as risk appetite surged with the first signs of economic improvement in multiple parts of the world. This Monday, after a rather risk averse past week prior to the Group of 7 meeting, the Aussie managed to climb as both international and domestic factors provided support for the South Pacific currency to revert its previous losing trend. The G-7 did not give as much importance to a strong dollar as analysts expected, bringing risk appetite back to markets also adding to optimistic news in Australia, as services industry shrank less than expected in the past month.
The Aussie definitely remains as one of the best bets in currency markets for this week, according to specialists. A favorable domestic scenario combined with the G-7 meeting outcome only adds to the already optimism situation in Australia which is expecting interest rates to be raised before the end of year, attracting overseas investors to purchase Aussie priced assets.
AUD/USD traded at 0.8749 as of 12:06 GMT from an opening rate of 0.8670 yesterday. AUD/JPY also climbed, touching 78.65 from 77.53.

Dollar Loses Slightly on G-7 Comments

The dollar started this week losing versus the euro and the pound after speculations that Group of 7 central bankers would provide statements supporting the dollar were not confirmed, erasing last week gains and setting the dollar to a bearish scenario again.
Last week was marked by a good U.S. dollar performance as a G-7 meeting was expect to stress the importance of a strong greenback, as it could provide solid competitiveness for exporters around the world, specially in the Eurozone, where they have been struggling to find costumers due to the current euro’s levels. Group of 7 policy makers did not signaled that they support a strong dollar, indicating that natural market regulations are more welcome than disorderly swings in currency markets, setting the U.S. currency back to a bearish scenario, where the Australian dollar also gained significantly this Monday.
The shift in sentiment towards the dollar may set the U.S. currency to a new losing streak towards record lows according to some analysts, but even if the scenario is not the most optimistic for the greenback, other currencies, with a few exceptions, are still struggling to find their way out of recession, so the dollar bearish scenario may not impact the currency as much as it would in normal conditions, since most parts of the world are still facing a recession period.
EUR/USD traded at 1.4626 as of 11:02 GMT from an opening rate of 1.4595 yesterday. AUD/USD traded at 0.8745 from 0.8670.

Pounds Ends Another Week Down on Crisis Concerns

The pound has been one of the most affected currencies by the credit crunch last year and during the past three weeks it suffered another substantial decline as the U.K. economic scenario continues to deteriorate and this Friday risk aversion is high again pushing investors towards safety.
Today the British currency found obstacles to climb in both domestic and international economy scenarios, as risk aversion rose globally. Nationwide Building Society indicated today a worse than previous forecast for house prices increase in the U.K., raising concerns on the real estate market which was one of the most impacted by the global slump last year, especially in England. Equities markets in the U.K. and overseas also had a negative day before a G-7 meeting which may approach sensitive topics regarding the economic future in the world’s wealthiest nations, forcing investors to opt for safer assets and damping demand even further for the U.K. pound.
The situation in the U.K. and the current problematic market sentiment make of the British pound one of the worse bets available in foreign-exchange markets, as Bank of England’s inefficiency to cope with financial problems in the country becomes more evident by the day, damping demand for the British currency which is likely to remain unattractive for a while.
GBP/USD traded at 1.5851 as of 10:49 GMT from a previous rate of 1.5966. EUR/GBP traded at 0.9173 from 0.9109.

Dollar Climbs on Grim Economic Forecasts

The dollar kept its previous days trend gaining versus the euro and high-yielding currencies as forecasts suggest that loan defaults and unemployment rates will keep deteriorating, raising risk aversion and adding attractiveness for the safe profile of the greenback.
An expected rise in unemployment figures, and a still very complicated credit situation in the United States rose concerns among traders regarding the economic recovery in North America and consequently in a global dimension, slashing earlier gains this week for higher-yielding currencies and favoring currencies with a relative safe profile, as the U.S. dollar and the yen. The dollar is likely to end today’s session setting a second week of gains versus the euro, as the current strength of the Eurozone currency is already raising policy makers concerns, as it decreases competitiveness for European products and could slow down the economic rebound in the region.
A negative day in stocks and commodities while market sentiment impacted by U.S. employment figures and the Group of 7 meeting which may approach sensitive topics are providing support for the dollar tor remain strong in the short-term at least. If concerns regarding a strong euro be confirmed in the G-7 meeting, the dollar may extend gains versus the euro during the next week.
EUR/USD traded at 1.4543 as of 9:47 GMT from a previous rate of 1.4565 yesterday. USD/CAD traded at 1.0894 from 1.0747.

Brazilian Real Down on Trade Surplus Revision

Domestic and International events brought the Brazilian currency down today after touching the highest rate in one year last week, suffering the consequences of corrective movements in trading markets combined with a degree of pessimism.
The Brazilian real declined today after the trade surplus target was lowered by the country’s government, suggesting that the global economic situation is still influencing negatively on the demand for South American products, causing the real to lose almost 1 percent versus the greenback in the end of today’s session.
USD/BRL closed today’s session at 1.8143 from an opening price of 1.8093.

Canadian Dollar Declines Further on Commodities

The Canadian currency, highly linked to commodities and equities markets fluctuations declined today as corrective movements affected stocks globally, as optimism is not as significant as last week among investors.
The loonie, as often the Canadian currency is associated, declined extending losses of last week’s session end, when it declined from a one-year high versus the greenback on renewed global economic optimism. Bank of Canada officials mentioned multiple times that a strong loonie may jeopardize the national economic rebound, since the North American country economy is highly dependent on exports.
USD/CAD traded at 1.0780 as of 10:38 GMT, from a previous rate of 1.0695 yesterday.

Will the Pound Trade at 1-to-1 Versus the Euro?

The pound continued to decline today versus most of the 16 main traded currencies on concerns that Lloyds Plc financial conditions are far from being sustainable, increasing speculations that the British banking sector may delay an economic recovery in the country.
The U.S. dollar touched a two-weeks high versus the pound as the Lloyds Banking Group Plc affirmed that it may exit a government program to insure other positions, leaving room for suspicions that one of the main British banking groups is having a hard time to stabilize its accounts. The euro also gained versus the British currency, touching the 90 pence level for the first time in 5 months, as the Eurozone is providing traders with more solid evidences of recovery, raising attractiveness for the euro in the regional aspect. The yen also pared most of its losses versus the pound this week, as today, the demand for high-yield declined slightly.
The financial scenario in Great Britain still is far from optimistic, considering it was one of the countries with the most liberal policy towards loans before the crisis, facing the biggest issues when the credit crunch struck the world last year. Domestic problems and international optimism can lead the pound to lose further versus majors, and it is not impossible that, in the medium term, the pound will trade in equality to the euro.
EUR/GBP traded at 0.8987 as of 11:18 GMT from a previous rate of 0.8905 yesterday. GBP/USD traded at 1.6356 from 1.6537.

Dollar Suffers Another Hit as China Posts Industrial Growth

The dollar had a week of extremely negative performance hitting several record lows versus most of the main 16 currencies as demand for yield and investors’ confidence rose worldwide, this time, fueled by two reports in China that added to the already growing optimism in trading markets.
Today in Europe, the dollar extended its losses versus the euro as countries like Germany and France are raising attractiveness for assets in the region, as this countries are posting the quickest and most favorable news regarding economic improvements. The British pound also posted significant gains versus the U.S. currency hitting a one month high after producer prices in the United Kingdom climbed for a sixth straight month, suggesting that one of the countries that most suffered with the credit crunch in Europe may be already in a process of recovery, which upgraded the pound’s outlook.
Economists analyze with a certain degree of pessimism the current situation for the U.S. currency. The dollar has been hit massively this week by an outflow of capital towards higher-yielding options, and the sentiment regarding the greenback could not be worse, as most of analysts suggest that the dollar downtrend may proceed further to an undetermined period of time and level, as long as the economic recovery continues.
EUR/USD traded at 1.4591 as of 11:34 GMT from a previous rate of 1.4555 in the intraday comparison. GBP/USD touched 1.6735 from 1.6513.

Australian Dollar Rebounds on Chinese Data

The Australian dollar was affected yesterday by a series of negative domestic reports that halted a rally which set the currency to a one year high versus the greenback, but today, after favorable reports coming from Asia, the Aussie managed to reestablish its previous winning trend.
The Australian currency climbed today versus several lower-yielding trading options, as stocks surged in Asia benefiting from two reports in China which indicated a more-than-expected rise in the industrial output and increased new lending figures, suggesting that one of the main trading partners of the South Pacific region is recovering from the current crisis. The New Zealand dollar, normally associated to the Aussie’s movements since several factors affect both countries’ currencies, also climbed further, reaching the ninth week in a row of gains versus the greenback, raising concerns in the Reserve Bank of New Zealand that a strong currency may affect the country’s recovery.
According to analysts, the recovery in China is more than essential for Australia’s economy growth, since the Asian country is the main destination for Australian exports. After yesterday’s negative reports that led to speculations regarding a delay in interest rate hikes, the Aussie is once again bullish, indicating that optimism in the region remains strong.
AUD/USD traded at 0.8643 as of 10:56 GMT after bottoming at 0.8555 yesterday. EUR/AUD traded at 1.6896 from 1.6999.

Pound Climbs on Bank of England Strategic Changes

The pound reached the highest level in almost a month versus the U.S. dollar and gained versus the euro after Bank of England statements regarding its strategy to stimulate the faltering British economy revived investors’ confidence in the United Kingdom’s currency.
After the Bank of England officials’ declarations indicating that the asset-purchasing program will not be extended further, as it has been previously, the confidence towards the U.K.’s currency improved, as interest rates in the country also remained unchanged, helping traders to be more attracted to inject capital in the British Isles. The pound rose versus the euro, rebounding from a one-week low, and higher-yielding currencies also declined as a rally in stocks that lasted five days was halted as concerns regarding the Chinese economic recovery emerged.
Bank of England’s strategic change was not a consensus among analysts, since a significant amount of them bet on the extension of the asset-purchase program, which would be definitely weighing negatively on the pound’s outlook. Currently, the expectations towards an economic recovery in the U.K. are more optimist, since Eurozone countries like Germany, one of the main immediate U.K.’s trading partners is also rebounding, fact which could accelerate the process of recovering for the Northern European nation.
GBP/USD traded at 1.6623 as of 12:28 GMT from a previous rate of 1.6529 yesterday. EUR/GBP traded at 0.8755 from 0.8806.

Australian Dollar Slides on Job Figures

As unemployment surged in the South Pacific nation of Australia, speculations that interest rates will be hiked before the end of the year decreased, making the Aussie to post its first decline this week versus most of the main traded currencies.
Today a report in Australia indicated job losses that came at almost a double rate than what forecasts expected, influencing the South Pacific currency further down after negative reports yesterday that made the currency to drop from a one-year high versus the greenback, as retail sales and home loan approvals declined in the country. Even if several negative news stopped the Aussie’s rally this week, it still remains the best performing currency among the 16 most traded, followed by the Brazilian real in second and its counterpart, the New Zealand dollar, that was also affected by a bearish market sentiment today towards the South Pacific region.
After this week’s negative data for the Aussie, analysts have reached a consensus that interest rates in Australia are unlikely to be hiked before December, fact which is weighing on the Australian currency performance this Thursday, adding to the already pessimist wave of negative reports that unexpectedly downgraded the outlook for South Pacific currencies.
AUD/USD traded at 0.8558 as of 10:37 GMT from 0.8617 in the intraday comparison. AUD/CAD traded at 0.9288 from 0.9312.

Pound Climbs on U.K. Manufacturing

The pound climbed today versus most of the 6 main traded currencies as the situation starts to become more positive for the British economy, pushing stocks up in London and consequently attracting international inflows of capitals to the United Kingdom.
After U.K. manufacturing output had the highest climb in 18 months today in a report published by the Office for National Statistics, the pound rose sharply, gaining virtually against all 16 main traded currencies worldwide, rebounding from a rather weak performance last week, when a wave of pessimism still affected pound-priced assets attractiveness. Stocks in the U.K. rose to the highest level since October last year, when the credit crunch plunged the British Isles into a intense sequence of losses in multiple bearish market weeks. U.K. manufacturing went much beyond forecasts, which suggested a 0.3 percent increase for the past month, but the actual report indicated an amazing 0.9 jump, being this surprising figures the main vector to push the pound up today in foreign-exchange markets.
According to many analysts, the pound remains undervalued, still suffering the consequences of the credit crunch that caused the biggest crisis in the country since the Second World War, but if favorable news still follow, the pound may find support for a big uptrend in the following months.
GBP/USD traded at 1.6554 as of 12:41 GMT from a previous rate of 1.6382 yesterday. EUR/GBP traded at 0.8744 after being traded at 0.8777 before the report was published.

World Economic Rebound Forces Dollar Down

The dollar is losing this week versus important major currencies like the euro and the pound as renewed optimism towards an economic recovery damped demand for the safety profile of the United States currency, as investors moved their bets to riskier assets.
A combination of bullish stock markets and speculations regarding an upcoming credit report in the United States affected the dollar negatively, as at the same time that investors seek higher yielding options as stocks grow, the U.S. credit report to be released today is likely to show a sharp fall, which is decreasing attractiveness for the greenback. The Japanese yen was one the biggest winners versus the greenback today as the government is likely to extend its measures to stimulate the economy, bringing renewed confidence towards the Japanese economy, which posted today a report indicating a fall in the numbers of bankruptcies for the first time in three monhts.
The bullish sentiment in equities markets is weighing negatively for the dollar, as being the main global reserve currency in the world, its safety profile attractiveness is decreasing thanks to a higher level of risk aversion among traders. Currencies like the yen and the pound still have room to climb versus the U.S. dollar, but its unlikely that the greenback will lose sharply, at least in the short-term.
USD/JPY traded at 92.31 as of 9:06 GMT from a previous rate of 93.17 in the intraday comparison. EUR/USD traded at 1.4418 from 1.4344.

Canadian Dollar Extend Gains on U.S. Optimism

The Canadian currency climbed even further before the end of this week’s session after optimism was renewed among traders with stocks and commodities climbing, After both Canada and the U.S. posted favorable reports regarding employment conditions.
After a report published in Ottawa indicating a rise of 27,100 jobs for the month of August in Canada, reverting July’s negative figures, the loonie was benefited as stocks in Toronto also rose considerably. This Friday, a U.S. report showing less than expected jobs cuts moved markets worldwide, creating bullish patterns in stocks around the world and influencing the crude oil rates, commodity which prices affect the Canadian currency directly, since the North American nation is one of the world top oil producers. The Canadian dollar had suffered since Bank of Canada officials stated that measures could be taken to weaken the currency, creating a bad sentiment for the currency, but the optimism is currently very strong, making an unstoppable bullish pattern for the loonie.
Analysts forecast that the Canadian dollar may rise to the levels previous to the national bank statements, when the greenback was trading at 1.0630, as long as optimism remains significant in equities and commodities markets, but it is hard to determine whether loonie’s bullish pattern will find support to extend its gains since the Bank of Canada already stated its position against a strong national currency.
USD/CAD closed the week at 1.0860 from 1.1039 on Thursday.

Swedish Krona Declines on Extended Loans

The Swedish currency declined today versus the euro and most of the 16 main traded currencies as the national central bank maintained interest rate in its historic record low of 0.25 percent leaving space for speculations that the country financial system is still facing a complicated situation.
The krona declined today versus several currencies after the Riksbank affirmed that it will offer more than $10 billion to Swedish bank to avoid the current banking crisis in the country, maintaining also the current interest rates at a record low of 0.25 percent, in order to stimulate credit and consumption to rescue the country’s economy from recession. The negative news for the Swedish currency also came with a statement from the nation’s central bank indicating that interest rates in the country will remain at extremely low levels through the next year, declining attractiveness for investors to beat in Swedish assets.
Even if the Swedish economy starts to give signs indicating that the worst moments are already behind, the situation remain very uncertain, and the expected maintenance of the rates at the record low level came together with an extremely dovish tone on Riksbank statement, shunning investors from Sweden and decreasing attractiveness for the krona, which may help Swedish products’ competitiveness, selling to markets at lower prices.
EUR/SEK traded at 10.2955 from 10.3550 in the intraday comparison.

Euro Gains Before ECB Meeting

The euro rebounded today after a negative performance during the beginning of the week as speculations regarding the future of the Eurozone economy improved, indicating growth beyond previous forecasts, spurring the attractiveness for the euro today.
The European central bank will decide its current benchmark interest rates which are expected to be maintained at the same level, but optimism among traders indicate that ECB officials are likely to upgrade growth predictions for the Eurozone as the economy starts to improve slowly as seen in report during the past month. The euro also benefited from optimism in equities and commodities markets today, stopping a seven day decline versus the Japanese yen as investors returned to purchase riskier assets abandoning options in Japan. The euro also gained against some high-yielding currencies, on speculations that some countries like Germany, may rebound quicker from the recession.
The ECB metting today is going to provide support for the euro to gain, according to specialists. Previous reports published in July mainly regarding Germany and France are likely to be mentioned by the ECB as signs of recovery in the region, which will attract more investors to purchase euro-price assets. If the Eurozone continues to perform well, interest rates are likely to be hiked in the medium term future.
EUR/USD traded at 1.4325 as of 10:27 GMT from a previous rate of 1.4217 in the intraday. EUR/JPY traded at 132.34 from 131.66.

Canadian Dollar Impacted by Declining Commodities Demand

The Canadian dollar is having one of worst performances this week in more than 2 months as risk appetite is declining worldwide, affecting currencies that perform well on growing optimism.
The loonie has been influenced since the past week when Bank of Canada officials affirmed that a strong loonie could jeopardize the nation’s economic performance, and since then, a strong wave of risk aversion also affected stocks and commodities, assets which play a fundamental role to decide the loonie’s trends.
USD/CAD traded at 1.1053 as of 11:06 GMT from 1.1037 yesterday.

Canadian Dollar Pare Gains on Risk Aversion

In the end of this week’s session the Canadian dollar pared its previous gains as risk aversion rose this Friday, affecting U.S. stocks performance and also the crude oil, the main Canadian commodity exported to the United States, influencing the loonie’s outlook.
The Canadian currency rose 12 percent versus its U.S. counterpart this year, and since June, Bank of Canada officials are stressing on the fact that a very strong loonie may bring a negative impact to national exporters, and measures to be taken are not ruled out, if the loonie climb further. This month the Canadian currency has been one of the biggest losers versus its U.S. counterpart among the 16 most traded currencies in foreign-exchange markets, losing 1.3 percent as this week ended, which is certainly a favorable scenario for Canadian exporters.
The rally perceived in the beginning of the month which set the loonie to around 1.07 per U.S. dollar raised eyebrows in the Bank of Canada, considering that a stronger currency decreases competitiveness for one nation’s products, with statements regarding this fact already helping to prevent the rally to continue temporarily. It is unlikely that the loonie will rise further, as the national bank already announced that it will take measures to stop its climb, so a rather neutral or bearish trend can be expected for the Canadian currency in the short term.
USD/CAD closed this week at 1.0913 from a previous rate of 1.0863 on Thursday.

Poland’s Economic Outlook Provide Support for Zloty

The Polish currency extended last week’s gain this week as the Eastern European nation is showing one of the quickest recoveries in the region, increasing attractiveness for the zloty regionally.
After growing beyond economists expectations for the last quarter, Poland is being considering one of the most solid economies in the region, fact which is favorable for the zloty to gain versus several currencies, but mainly against the euro as the Polish currency suffered a severe devaluation during the worse moments of the global slump. The Polish currency climbed for a second week in a row on the country’s economic outlook.
EUR/PLN closed at 4.0923 from a previous rate of 4.1162 yesterday.

Yen Gains on New Tax Law

The Japanese currency extended its weekly gains today on speculations that Japanese investors are bringing overseas investments capital back to the country to profit from a new tax law, making the yen to climb further in an already pessimistic scenario.
Various factors provided support for the yen to gain for the third day in a row versus most of the 16 most traded currencies as today speculations indicated that last quarter’s GDP figures in the United States will indicate a deeper recession than in previous one, fact which is spurring demand for the relative safety of the Japanese currency. The pound also declined versus the yen as Japanese exporters are repatriating assets to the country to benefit from new tax regulations, even if the highest rise in home prices was posted today in the United Kingdom.
Analysts indicate that this week’s gains for the Japanese currency are very much related to new Chinese regulations approved in order to avoid further chaotic financial episodes in the country, but provoking side effects of pessimism in trading markets. Today’s quarterly U.S. GDP report is also causing market sentiment to have a bearish tone, since a longer recession in the U.S. would certainly rise risk aversion among traders, a yen positive factor.
GBP/JPY traded at 151.50 as of 10:46 GMT from a previous rate of 153.45 yesterday. EUR/JPY followed, from 134.51 to a current price of 133.52.

Pound Down on Chinese Comments

The U.K. currency posted losses today versus the euro and the greenback as stocks declined in the country and the Chinese Premier Wen Jiabao affirmed that the world economy is still facing a period of uncertainty, which brought risk aversion back in trading markets.
A reversal trend in equities markets pushed the British currency down and the MSCI World Index lost consistently mainly influenced by Asian stocks, who had a negative day after Chinese Premier Wen Jiabao made pessimist remarks towards the future of the world economy. The pound also lost consistently versus the euro as the Eurozone economy is showing signs of better economic performance than the British Isles, fact which is leaving room for speculations that interest rates will remain at record low levels set by the Bank of England this year.
p;Chinese declarations today affected the already faltering performance of the British currency, which is still declining as a consequence of BOE’s quantitative easing policies, which so far have been unable to rescue the U.K.’s economy from the worst recession in 60 years. The pound is likely to remain bearish unless the economy in the United Kingdom starts to show solid evidences of recovery, which haven’t been the case so far.
GBP/USD traded at 1.6372 as of 10:36 GMT from a intraday rate of 1.6494. EUR/GBP rose to 0.8728 from 0.8677.

Hungarian Forint Declines on Interest Rate Speculations

The forint is starting this week under pressure falling from the highest level in almost 10 days before the Hungarian central bank meeting today, which is likely to slash the national benchmark interest rate to a record low for the country since the end of the socialist era.
The Hungarian central bank will publish its decision regarding the current interest rate levels today at noon, GMT time, and according to most economists the Central European nation is likely to cut the rates to a record low of 8 percent from the present 8.5 percent, the highest in the European Union together with its neighboring country, Romania. The speculations regarding the interest rates are forcing the forint down as it can be understood that current government efforts to stimulate the economy are not being sufficient to revive Hungary from its worst recession in 18 years, as unemployment doubled since last year, and the IMF bailout was not enough to revive growth in the nation.
Analysts indicate that even if speculations are suggesting a 0.5 percent slash for the national interest rates in Hungary, the central bank may once again surprise economists as the previous time and go for a full 1 percent cut, which would be definitely worse for the forint’s performance.
EUR/HUF traded at 268.70 as of 10:21 GMT from an opening rate today in Budapest of 268.50. USD/HUF followed the same trend climbing slightly to 187.68.

Will the Dollar Rebound This Week?

The U.S. currency lost towards the end of the past week as several factors improved investors’ confidence worldwide, attracting investors to emergent-market currencies, as commodities and stocks surged fueled by positive reports in Europe and Asia, shunning investors from greenback priced assets.
Last week’s end was predominantly optimistic in markets around the world, mainly with Germany and France posting signs of economic growth as PMI increased in both countries and as Federal Reserve Chairman Ben Bernanke stated that the recession is easing adding to the already risk driven attitude among traders globally. The greenback suffered significant losses due to this new wave of risk appetite, since the global slump easing is reflecting in higher-yielding assets appreciation, which declines attractiveness for the relative safety of the greenback.
The forecast for this week regarding the U.S. dollar will rely mainly on reports to be released in Wednesday, when new home sales and durable good orders will be published, and mainly on Thursday, when the quarterly gross domestic product performance is due to be released together with unemployment claims, which are likely to reflect positively for the greenback if the data comes beyond expectations, mostly regarding the GDP, which is forecast to indicate a decrease in the U.S. recession figures, but still remain in the negative field.
EUR/USD ended the week traded at 1.4328. GBP/USD closed at 1.6501.

German Manufacturing Provides Support for Euro Climb

Germany and France posted favorable reports today indicating that the wealthiest countries in the Eurozone may be finding its way out of recession, evidence which helped the euro to gain versus several currencies towards the end of this week’s session.
After surprising economists worldwide several days ago when Germany and France posted an unexpected growth for the second quarter, today, the strongest economies in the Eurozone bloc posted a rise in manufacturing and services industries, once again going beyond estimations and bringing optimism suggesting that the current recession in the region may be having its final days. The PMI numbers were not sufficient to make the euro to rally versus the yen, since China affirmed that it may restrict capital requirements for domestic banks, causing an instant negative reaction in Asian stocks, which is a yen positive factor.
Analysts evaluate the current market reaction to European PMI numbers as a short-term market impulse, even though the data provided are solid and indeed an evidence of economic improvements, mainly in Germany, while France performed less positively in these reports. Germany is the Eurozone’s economic heart, and when the country finds its way out of recession the Euro is like to be bullish.
EUR/USD traded at 1.4303 as of 9:55 GMT from a previous rate of 1.4237 in the intraday comparison. EUR/JPY traded near neutrality from yesterday’s rate at 134.12.

Quantitave Easing Speculations Affect Pound Performance

The pound erased yesterday’s gains this morning after the Bank of England may insist in further quantitative easing measures as an attempt to revive the weakened British economy, which was one of the most affected by last year’s credit crunch.
The pound is losing today versus most of the 16 major currencies after Bank of England Governor Mervyn King suggested that further measures should be taken in order to rescue the British economy from the current recession, raising speculations that interest rates in the country will remain in bottom levels. Quantitative easing measures, such as printing out more bank notes are likely to be used by the Bank of England to stimulate the economy domestically, which would certainly reflect in a prolonged period of losses for the pound, currency which declined massively since last year’s second semester. Naturally opposed to the pound’s movements, U.K. gilts rose today.
The pound will remain pressured in the short-term, according to analysts. The United Kingdom is being one of the most affected countries by the current global recession, and measures taken so far proved to be ineffective to reestablish a sustainable economic growth in the country, which is influencing the nation currency negatively, being the pound one of the most uncertain bets among the top 6 traded currencies.
GBP/USD traded at 1.6422 as of 11:12 GMT from 1.6588 hours before BOE’s last declaration. EUR/GBP rose to 0.8600 from 0.8525.

Euro Reverts Losing Trend on Confidence

The euro stopped its decline versus the yen and the dollar today as optimism reappeared in Europe after a report indicated that German business confidence had the highest rise in more than a year, spurring demand for the Eurozone currency in forex markets.
After several days of consecutive declines the Eurozone currency reverted its trend and climbed after the German ZEW economic sentiment, a highly considered index by traders, climbed the most in more than a year, indicating that the wealthiest economy in the European Union may be dodging its way out of recession. A part from regional news in Europe, an U.S. housing report is likely to show positive numbers today, which declined attractiveness for the currencies which gained the most versus the euro during the past days, the Japanese yen and the U.S. dollar.
The surprising high ZEW economic sentiment helped European markets to pare some of the losses from previous days, but even with a record high for this report, the euro’s did not manage to rally sharply, still indicating that traders remain rather cautious while investing in euro-price assets. Analysts forecast that the euro may gain further if the U.S. housing reports push risk appetite higher today.
EUR/USD traded at 1.4119 as of 10:23 GMT from a previous rate of 1.4047 yesterday. EUR/JPY traded at 134.28 from a previous rate of 132.73 yesterday.

Pound Falls as Real Estate Crisis Deepens

After rallying to a 10-month high versus the dollar two weeks ago, the pound is declining severely versus most of the main traded currencies, as the real estate scenario deteriorates in the United Kingdom, shunning investors from pound-priced assets.
The most reliable internet real estate portal in the U.K., Rightmove Plc, indicated that house prices in Britain declined 2.2 percent this month, after climbing 0.6 percent in July, a fact which immediately declined attractiveness for the pound, since the real estate sector in the U.K. was the main responsible to plunge the country in its worse recession since the Second World War. Stocks worldwide also declined, pushing investors to safer bets, making the Japanese yen and the U.S. dollar the biggest winners today versus the Great Britain pound, as reports indicate that economic conditions in Europe remain worse than in other areas like in South Pacific and Latin America.
Both international and domestic events are affecting the pound this week, and may plunge it to lower levels in the short term as risk aversion is growing worldwide, at the same time that the British economy is unable to show signs of solid recovery, which push traders naturally away from investing in the country.
GBP/USD traded at 1.6301 as of 11:14 GMT from an opening price of 1.6488 yesterday. EUR/GBP rose to 0.8626 from 0.8595.

Negative News Fuel Yen’s Rally

The Japanese currency started another week gaining versus most of the main currencies as several domestic and international events spurred demand for refuge currencies, affecting negatively mainly currencies in Europe this Monday.
Today’s Japanese quarterly GDP figures were posted reaching a 3.7 growth in the second quarter, which was below expectations, raising concerns that an economic recovery in Asia may take longer to appear, oddly enough favoring the yen in foreign-exchange markets. Colonial BancGroup Inc., a traditional U.S. lender, had its operations terminated due to its incapability of managing its growing debts, being followed by other lenders in Arizona and Pittsburgh, raising the number of total banking bankruptcies to 77 in U.S. this year, a fact which certainly adds to pessimism in trading markets. The pound was one of the biggest losers versus the yen today, as home prices continue an historic decline in their price in Great Britain.
Traders are once again purchasing the yen massively in order to guarantee their portfolio’s safety, according to analysts. Even if an economy recovery starts indeed to happen, there are still many global slump consequences that will become evident, raising the number of bankruptcies and unemployment figures worldwide, which will certainly raise attractiveness for the safety profile of the Japanese currency.
GBP/JPY traded at 154.37 as of 9:34 GMT from a previous rate of 156.35 when markets opened this morning in Asia. EUR/JPY continued its decline, being traded at 133.36 from 134.41.

German Unexpected Growth Improves Zloty Rally

The Polish currency benefited from yesterday’s report indicating an unexpected growth of 0.3 for the German economy in the second quarter, which improved investors’ confidence towards the future of European economic conditions.
Among emergent-market currencies, the zloty is being one of the best performing currencies, and yesterday, Germany’s quarterly GDP report pushed the Polish currency even further to higher levels, as improving economic numbers in the region led traders to speculate that the Polish central bank is likely to stop cutting interest rates, which is favorable for the zloty. The zloty has advanced 19 percent since February when it bottomed out to the lowest level since the country joined the European Union, and being Germany the main trading partner of the Polish nation, yesterday news impacted investors in Warsaw heavily, pushing stocks and the national currency up.
Poland is likely to benefit intensively from the Eurozone economic recovery among the eastern EU members, since its tax cut policy made them able to be the only country in the region to dodge recession in the first quarter. The influence of German economic figures is extremely high in Poland, not only for being the nation’s main trading partner, but also for being the wealthiest and most dynamic economy in the European Union.
EUR/PLN traded at 4.1200 as of 9:51 GMT from a previous close yesterday at 4.1340.

Inflation Figures Affect Pound Performance

The pound started another day losing versus the dollar and the euro in the European session as the Bank of England affirmed that the 2 percent inflation target won’t be met, raising concerns regarding the British economy’s health.
The yen was one of the biggest winners today versus the pound, after Bank of England Governor Mervyn King stated that it will take time for the Great Britain banking sector to recover from the current delicate situation, lowering traders’ bets that interest rates will be raised this year in the United Kingdom. The current recession and credit shortage in the British Isles are likely to set the monthly inflation below the 1 percent barrier, indicating the seriousness of the British financial system situation. It is unlikely that the Great Britain will initiate a substantial recovery before 2010, which weighs massively on the pound.
The previous week rally for the British currency was almost entirely pared as international news, mainly from China, and grim speculations domestically annulled the pound’s chances of continuing to climb further. Due to a extremely liberal credit pre-crisis credit system, the British Isles are being one of the must punished regions in the world with the consequences of the global slump.
GBP/USD traded at 1.6441 as of 10:44 GMT from yesterday’s rate of 1.6457. EUR/GBP climbed to 0.8603 from 0.8574 yesterday.

Polish Zloty Down as Rally May Halt Economic Growth

The Polish currency, which was climbing systematically during the previous two months as signs of economic recovery attracted traders to this emergent European Union economy, had a sharp decline this week as the current currency rates may affect the economic recovery in the nation.
Poland’s economy was the best performer among the 10 eastern European union members in the first quart of this year, after the national government cut taxes to stimulate the economy the zloty climbed 14 percent versus the euro, a rally which is raising concerns about the future conditions of the Polish economy. Today the zloty had the sharpest fall in two months, leading a day of declines in the currency market for eastern European countries, as pessimism brought investors back to safer markets.
EUR/PLN closed today in Warsaw at 4.1736, from an opening price of 4.1215, making the zloty to slide more than 1.5 percent.

Australian Dollar Down on Chinese Negative Data

The Australian Dollar lost today against several currencies like the yen and the U.S. dollar after a negative report in China pushed investors back to safer assets, damping demand for the Aussie’s riskier profile.
The Australian currency lost the most in a week today after Chinese banking data came worse-than-expected by economists, showing a slide in new lending figures and a disappointing rise for fixed-assets investments, indicating that one of the main global economies may still face further months of recession. The New Zealand dollar as well as its Australian counterpart are considered high-yielding currencies despite the current low interest rates in both countries, and these negative reports in China affected the Aussie and the kiwi today, paring much of last week’s gains versus the yen and the greenback.
Economists affirm that last week’s euphoria stimulated forecasts to be set higher, and the Chinese numbers today frustrated most of traders, which were attracted to refuge currencies like the U.S. dollar and the Japanese yen to provide more safety to their portfolios. The currency market tends to remain very volatile until the global economic conditions remain uncertain, and it is hard to predict what direction high-yielding currencies will take towards the end of the year.
AUD/JPY fell to 80.73 as of 10:54 GMT from a previous rate of 81.70 in the intraday comparison. AUD/USD followed the same trend from 0.8417 to a current price of 0.8363.

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