G-7 Nations Intervene To Weaken Japanese Yen

Dominating currency news today is the action taken by the G-7 (the seven most industrialised nations) to mutually intervene and weaken the rising Yen which is damaging to the Japanese economy at this fragile time following the earthquake. Following the rise of the Yen against the US Dollar to the strongest levels since the Second World War, the G-7 began intervention which has begun to bring the currency back down. We would like to let you know that our company charity Global Angels are providing direct medical relief to Japan covered by their 100% Promise. This means that 100% of every Pound donated goes directly to the cause helping local people. You can find out more and donate HERE.

Pound Sterling – UK Markets

As well as jumping up on the Yen following the G7 currency intervention, Sterling has also gained on the US Dollar. There has been a drop however against the Euro with Sterling back to around a four month low on the single currency. UK consumer confidence figures fell to a record low in February as pessimism grew about the recovery and outlook for jobs in particular. The index dropped to 38 which is the lowest since records began in 2004. Sterling’s drop against the Euro was also fuelled by comments from Bank of England Deputy Governor Charles Bean suggesting that Britain is entering a ‘hazardous’ period. Some are now pushing back interest rise expectations from the summer to September which will not help the Pound.

US Dollar – US Markets

US economic data helped the Dollar’s partial recovery with first time jobless claims falling by 16,000 last week in the latest set of figures. Consumer prices also rose by 0.5 percent in February. There is no US data today so the Dollar is likely to respond to broader themes and could continue to lose out to the Euro if the single currency keeps strengthening.

Euro – European Markets

The Euro improved on Sterling and the US Dollar following positive demand at Spain’s latest bond auction easing fears about the ability of nations to raise their own funds to tackle debt. Trade balance data from Europe this morning does not seem to have damaged the Euro’s robust position as it continues to accelerate today despite the fact reports have revealed that the trade deficit had widened to 14.8 billion Euros in January.

Other Currencies – Highlights

The Japanese Yen has come off highs following the meeting of G7 officials on Thursday evening. For the first time in over ten years, the seven leading industrialised nations from Japan, Europe, the UK and the US have taken action together to help weaken a currency as the strong Yen could have de-railed the economy at this fragile time. The strengthening of the Yen can be attributed to both currency speculators storing funds in the safe haven currency as well as the repatriation of investments held overseas in preparation for re-building work.