Japanese yen is gaining against all its rivals today, as the stocks fall down and the high-risk currencies start to meet their demise. While traditional carry trade counterparts of yen - Australian and New Zealand dollars, are often unstable during such times, the less risky euro and Great Britain pound are also losing now.
The European Central Bank council member and the governor of the Bank of Italy, Mario Draghi said yesterday that the monetary policy should be tightened in case the inflation in Eurozone will start to cross the target borders.
Almost all Asian currencies, especially high-yielding ones, took a massive hit this week, with the highest drops being near the end of the week. South Korean won has posted the largest weekly decline in almost two months.
Chilean peso gained yesterday against other currencies, notably against the U.S. dollar, after the Central Bank of Chile President, José de Gregorio, commented that the bank will have to increase rates again on the next meeting.
The U.S. dollar, even after a recovery from the two and a half year bottom against the Japanese yen, is remaining weak against this Asian currency as the investors worry about the current state of the U.S. economy.
Financial experts from the Standard Chartered PLC expect a coordinated scrapping of the peg to the U.S. dollar from the monetary authorities of the Middle Eastern countries - Saudi Arabia, U.A.E., Qatar, Oman and Bahrain.
The Great Britain pound today reached its lowest value against the Japanese yen since 11th of July, 2006, continuing the strong bearish trend that has started during early November 2007.
New Zealand dollar is showing a high level breaking growth today against the U.S. dollar after the confidence in the carry trade and other high-risk investments rose on the Fed’s rate cut expectations.
France’s European Affairs Minister Jean-Pierre Jouyet said today in St. Julians, Malta, at the press-conference devoted to the euro’s introduction to Malta, that the European economy can’t cope with the current exchange rates of the European currency against its major foreign counterparts - yuan, yen and dollar.
Central Bank of Chile decided yesterday to raise the main national lending rate from 6.00% to 6.25% in order to reduce the threat level of the rising inflation, which has now reached its highest level in almost ten years.
