The big news this morning comes from Japan – the BOJ reduced the interest rate to 0.1% – quite symbolic. Japanese Yen traders aren’t used to see moves in interest rates – this is the second one in the recent two months.
The Bank of Japan also announced that it would flow some cash into the financial establishments. This caused a decline in stock markets in Asia. The statements that were released by the BOJ weren’t dowish enough – USD/JPY is at 88.75. The dollar made gains in the last hours against all currencies apart from the Yen.
Volatility in the Forex market has increased in the last days. The Euro and the pound made big gains and big losses. These events this week, were mostly the result of the big move by Bernanke – interest rate cut of 0.75% to 025%. The greenback was hit badly, but later retracted very nicely.
Today, Friday, doesn’t feature too much economic data. Germany’s PPI (m/m) came out lower than expected – a drop of 1.5%, a sharper drop than 1.0% which was the consensus.
In Britain, the Revised Business Investment (q/q) also came out lower than expected at 1.3%. This doesn’t seem to affect the GBP/USD, that already lost ground before, currently at at 1.5033.
Only in Canada, some more major news is expected: The Canadian Core CPI (m/m) is expected to show a decline of 0.2%. USD/CAD is at 1.2349.
It’s a quiet day today in the United States, just before entering the week of Christmas.
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