- Concerns that the global economy continues to grow slowly has improved the situation for the Japanese yen, which is slowly beginning to come back from the seven-year lows against its US dollar counterpart. Japan will be voting this week with most opinion polls suggesting that Prime Minister Shinzo Abe will remain in power. This suggests looser monetary policy to help the country achieve their targets of improved growth and higher inflation. In the short term, the gain for the yen will be limited as underlying worries still remain about the Japanese economy after growth in the third quarter was disappointing, resulting in reports of a quicker recession for Japan.
- The Australian dollar has steadied from its four-year lows against the US dollar. The general sentiment for the Australian currency is that it still remains weak as business confidence fell to 1 in comparison to 4 in October. Over the past week or so, we have seen a constant trickle of poor data from Australia, making an interest rate cut a real threat. This has been made worse by the struggles of its largest trading partner, China.
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