Yen Lower As Lehman Given Support

Daily Forex Fundamentals | Written by Finotec Group | Sep 10 08 09:33 GMT |

The Yen was down from a 13 month high against the euro on Wednesday on news that Korea Development Bank was seeking a controlling interest in Lehman Brothers. The Japanese currency was buoyed on Tuesday as Lehman’s share price plunged the most in one day and carry traders unwound their positions funded in yen. However, with the news that a South Korean state-run bank will look to buy a stake in Lehman, investors increased their holdings of higher-yielding assets funded in Yen. 'This report is a big relief for risk appetite,' said the head of foreign exchange strategy for Japan at Royal Bank of Scotland in Tokyo. 'The net impact will be to send the yen lower.' The EUR/JPY was trading at 152.10 at 8.13am GMT Meanwhile in London, Sterling was near a 2 ½ year low against the dollar as report indicated that the UK was now experiencing negative growth for the first time in over 10 years. The National Institute for Economic and Social Research indicated that GDP fell 0.2% in the last three months and 0.1% in Q2. A faltering economy has increased speculation that the BOE will cut rates, pushing the pound lower. 'We're just at the beginning of this downturn' and inflation 'certainly hasn't peaked,' the Deputy Governor of the Bank of England commented. At the same time, 'we're very aware of the risk of perhaps overdoing it and causing an unnecessary slowdown in activity,' he said. Cable was trading at 1.7667 as of 8.22am GMT. Economic Calendar Time Country Event Period Previous Forecast Significance 23:50 Core Machinery Orders m/m JPY Jul -2.6% -4.1% ** 21:00 Interest Rate Statement NZD Jul 8.00% 7.75% **** 14:35 Crude Oil Inventories USD -1.9M ** 12:30 Labor Productivity q/q CAD Quarterly -0.3% ** 08:30 Trade Balance GBP Jul -7.7B -7.5B ** 07:00 ECB President Trichet Speaks EUR *** 06:45 Industrial Production m/m EUR Jul -0.4% 0.1% ** 06:45 Trade Balance EUR Jul -5.6B -5.05B ** 05:00 Leading Indicators m/m JPY Jul -1.7 0.6 ** Finotec Group Inc. http://www.finotec.com/ Disclaimer: FINOTEC Tradings Market Commentaries are provided for informational purposes only. The information contained within these reports is gathered from reputable news sources and not intended as investment advice. FINOTEC Trading assumes no responsibility or liability from gains or losses incurred by the information herein.