Both central banks decided their monetary policy changes today regarding their main interest rates. Both Bank of England and European Central Bank left their interest rates unchanged - 5.50% and 4.00% respectively as the majority of the market experts were predicting.
Japanese Ministry of Finance released a report today regarding the country’s international exchange reserves and the foreign currency liquidity along with the structure of the overall assets as on the end of December 2007.
Tokyo based massive sale of the Japanese yen spurred the daily drawdown of this Asian currency. Residents preferred to sell the yen opting for the riskier but higher yielding currencies, such as euro, Australian and New Zealand dollar and South african rand (so called carry trade investing).
The Indian rupee rose today again, making a fourth bullish day in a row after the national stock index rally attracted the investments of the global funds to into the Indian emerging economy.
The Canadian dollar showed an unprecedented growth against the U.S. dollar last year. Rallying almost straight from 1.1635 to 0.9905, USD/CAD lost almost 15% in one year and broke two important support levels - psychological barrier of 1 CAD per USD and reaching its lowest value since the floating of the USD/CAD rate - 0.9057.
Chile’s Consumer Price Index increased unexpectedly last month by more than analysts forecasted, increasing the odds that the Central Bank of Chile will raise the refinancing interest rate on the next week’s meeting to fight the record breaking high inflation.
The Great Britain pound recovered the part of its recent losses against the euro, the dollar and the yen today after the U.K. services index for December (reported by the Chartered Institute of Purchasing and Supply) unexpectedly rose.
According to the China Foreign Exchange Trading System, the dollar/yuan central parity rate was set at its record low since the scrap of peg to dollar - 7.2775; down from 7.2996 previous recent record level.
Both Australian and the New Zealand dollars gained today on a presumption that the international investors bought Australia’s and New Zealand’s government bonds as their premiums yield more than their U.S. and Japanese counterparts.