The JPY Rises Against The Euro As Asian Stocks Slide

Daily Forex Fundamentals | Written by Finotec Group | Jun 23 09 08:55 GMT |

The JPY rose against the euro as Asian stocks plummeted on concern the global recession will be prolonged, spurring demand for the relative safety of Japan's currency. The JPY gained against all 16 most-traded currencies before a U.S. report tomorrow that economists say will show durable-goods orders declined in May. The Japanese currency also gained for a third day against the dollar after the World Bank yesterday forecast the global recession will be deeper than it earlier projected. 'Worries that the 'green shoots' of the global recovery are unlikely to be sustainable may make investors risk averse,' said Hideki Amikura, deputy general manager of foreign exchange in Tokyo at Nomura Trust and Banking Co., a unit of Japan's largest brokerage. 'This will probably lead to yen strength.' The EUR/JPY is currently trading at 132.35 as of 9:00am, London Time Canada's dollar the loonie fell against its U.S. counterpart on speculation recovery from the first global recession since World War II will take longer than some forecast. 'There's a little bit more focus on the fact that the green shoots are just that, we haven't seen the growth,' said Jonathan Gencher, Toronto-based director of currency sales at BMO Capital Markets, a unit of Canada's fourth-largest bank. 'Today risk is off.' Canada's currency still was headed for its first three- month gain in four quarters. It appreciated the most last month in almost six decades as investors ventured out of havens such as the greenback and yen into riskier assets, including stocks and commodity-linked currencies. Investors should close bets that the greenback will fall against the loonie, according to Citigroup Inc., which took such a so-called short U.S. dollar position on June 12 at C$1.1191, resulting in a 3 percent loss, a team of strategists wrote today in a note to clients. The USD/CAD is currently trading at 1.1550 as of 9:05am, London Time. The BOE is still thinking about how much more money to pump into the economy rather than when to withdraw existing stimulus, even if there are signs the worst of the downturn is over. A few surveys in the last few weeks have suggested the economy has started growing again or that at the very least its decline is moderating after it shrank by 1.9 percent in the first three months of the year. The Bank of England has cut the interest rate to a record low of 0.5 percent and embarked on a 125 billion pound asset-buying programme which is due to be completed by the end of July. The GBP/USD is currently trading at 1.6235 as of 9:16am, London Time. 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.