The Japanese Yen reacted positive to a move by the Bank of Japan to continue the quantitative easing program. The central bank decided to make ¥3 Trillion or $32.8 Billion available to the cash hungry companies in their latest effort to jump start the economy and curb deflation. Overall, the move may be negative for the Yen as countries with quantitative easing program tend to underperform countries with solid economies during time of sustainability. The Japanese interest rates remained at 0.10% while the currency is trading near 91.00
Risk appetite was timidly curbed after German ZEW Survey printed less than superb figures. Economic Sentiment dropped head first, dropping to 28.7 from 45.8 last month. The numbers are explained by current situation in the EU, regarding issues of sovereign debt. Current Situation improved marginally from the previous month. European Economic Sentiment on the other hand followed that of Germany and significantly under printed the expectation of 41.2 showing 18.8 reading. The Euro is currently approaching 1.23, despite weaker than expected data.
The British Pound continued to advance to 1.4700 after Consumer Price Index printed cooler than anticipated figures. Britain had a problem with rapidly increasing inflation rate, however, the latest reading of 3.4% reliefs the pressures on the BoE to raise the interest rates.
The Reserve Bank of Australia reassured the markets that the country is performing at all cylinders with marginal fears of inflation pushing the Aussie to 0.8600 against the greenback. The Loonie continues to press for parity crossing below 1.03. Kiwi is approaching 0.700 against the buck. The Housing prices fell for the second consecutive month in New Zealand suggesting the central bank will be timid with raising its interest rates during this year.
Today’s docket calls for Empire Manufacturing and Import Prices to be released at 12:30GMT or 8:30AM EST. Half hour later TIC Flows will be announced out of US, the markets expect a positive reading of $70 Billion.
Overall, risk appetite continues to proliferate. Therefore, higher beta currencies such as AUD, NZD, CAD, EUR, and GBP are likely to remain winners for the remainder of the US Session as long as no negative announcements curb the risk rally.
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