The currency blog

this week has been no different to any other trading week in regards of volatility. The Japanese yen has taken a hit against GBP and also AUD this week, but will we see a recovery? I think so, I believe by next week we will see the Yen back to 155 levels against the pound and possible 76-77 levels against the Australian dollar.

This weeks biggest movers can be seen below

AUD/JPY from 77.48 to 79.07
EUR/AUD from 1.7379 to 1.7075
GBP/CHF from 1.76 to 1.7870
AUD/USD from 0.8171 to 0.8282
GBP/JPY from 155.77 to 157.75

although the euro seems pretty comfortable in the ranges of 1.1080 and 1.1170, we could start to see it break higher, touching to 1.1250, and perhaps 1.13 again in the near term. Euro zone GDP (gross domestic product) is due out tomorrow at 9am GMT, this data could send the stock markets tumbling as well as the euro, as we see the European economy shrink yet again. the figures are expected to show a decline of - 2 % quarter on quarter and -4.1% year on year, compared to last years -1.5%. From this we can see the massive difference in the state of the economy over one year, and things could continue to get worse before they get better. We saw the euro touch on 1.13 at the end of last week but soon fell back to 1.10/1.11 after the ECB cut their rates down to 1%. Going from a wait and see aproach to actively trying to ease inflationary pressures gave the euro immense strength, and becuase of this it is unclear what they will do at their next meeting. Weber does not want to go below their floor rate of 1% however some other members are arguing to cut futher. we shall have to wait and see!