Today's big forex moves are coming in dollar/yen trading on the first day of trading with a new U.S. president.
steps in to preside amid a whirlwind of office redecorating, prayer meetings and carpet cleanings things are truly turning upside down. Recent trends of a strong euro and a weak yen, with the dollar landing in the middle, have been reversed today.
On the back of a weak economic report out of Germany, the yen is currently making strong gains against both the euro and dollar, and the dollar is now firming against the euro.
reported earlier this morning that its business climate index for December fell to the lowest level in more than a year. This is an undeniable signal of a slowdown in the German economy, and strong player in, and often reflective of, the euro-land economy as a whole. Euroland
Consumer Price Index (CPI) data for December was also released this morning, falling to 2.6%, in line with expectations.
This slowdown in the European economy trails declines in both the U.S. and Japanese economies, both of which may be near the end of the downturn, rather than the beginning. As a result, the euro fell against the yen to 108.30 yen from 109.30 at Friday's close.
Aiding the yen's upward momentum today is a high volume of profit taking amongst traders. Recent peaks in dollar/yen and euro/yen trading have traders skimming off the top, thereby increasing demand for yen, and pushing the value of the yen up.
The dollar had recently fallen in trading to 116.53 yen per dollar, down from its last close on Friday of 117.15.
The euro's decline in value against the yen is taking pressure off of the euro/dollar trading today. The euro/dollar was most recently at $0.9290, down from $0.9336 at Friday's close.
Amidst recent economic reports that have lowered expectations of an interest rate cut in Australia in the near future, the Aussie dollar seems to have fallen victim to the fluctuations of the euro and yen. The Australian dollar is losing value to the U.S. currency today, recently trading for $0.5521, down from $0.5568 at last close.
The British pound has also been a victim this morning, following the euro on its decline against the dollar. The pound was most recently trading for $1.4535, down from $1.4626 at Friday's close.
The Canadian dollar was most recently gaining value on the U.S. currency, with the U.S. dollar trading for C$1.5107, down slightly from C$1.5120 at Friday's close.