Risk Aversion Returns
The Euro fell to a one-month low against the Yen as risk aversion returned and the currency was pressured further on expectations that the European Central Bank would lower rates later in the week. Market shares were down after the release of data that showed that the US, the world’s largest economy, lost over a million jobs in the last two months of 2008.
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Yen Offers Safe Haven
Investors took advantage of the haven and Forex opportunities offered by the Japanese Yen sending the Yen to a 3-week high against the dollar. Both the Yen and the dollar are seen as safe havens in troubled economic times and offer investors Forex opportunities as well.
Dollar at 3-Week Low Against Yen
The U.S. dollar also tumbled to a 3-week low against the yen at 89.62 yen. The British Pound fell further against the dollar by 1.3% to the $1.50 mark. The pound is viewed as a high-risk currency offering minimal Forex opportunity. The beleaguered Pound fell further against the Yen to 134.34. IdeaGlobal strategist coached clients to be “more doubting than riding a trend” in a note to clients stated that, “Despite the market’s current bullish attitude, be mindful of the losses that have occurred over recent decades.” IdeaGlobal had advised clients to be ” cautious ” and ” [MT4] adds, “Keep an eye on the market as normal volatility could take a downturn form a sideways price motion.”
The pound May Fall Further
0007 GMT: The Pound fell further against the Yen at 134.34, down from its previous low of 134.00, and down from a recent high of 134.90. IdeaGlobal downgraded its long position in the currency and stated, “Despite a more positive outlook for the U.K.. economy, we continue to be cautious following the Pound’s latest poor performance.” The Pound fell further against the Yen to its hourly low of the dollar at $1.5913. The Yen was trading at a higher $1. 6110 to the dollar at the close of trading on Friday.
Bank Of Canada To Start Forex Trading
The Canadian economy is expected to slow down and the Bank of Canada is expected to start a trial run of Forex trading. Later in the week, the bank is expected to hold back on raising interest rates, keeping rates near zero for an extended period and possibly for several years. This will help the economy rebound more quickly than that of the US.
The dollar and Yen Remain Strong
The strength of both the Dollar and the Yen remains strong and unlikely to change anytime soon. Both the Pound and the Dollar are near historical highs and remain firm and fundamental factors are linking currencies together. Everyone knows that the US is the most influential and the most presential nation on earth. Its currency is the world’s reserve currency and is influenced globally.