Central bankers undermine their currencies

Elsewhere this week we saw the commodity-back currencies get off to a good start following an announcement from China of plans to expand economic freedoms and do more to shore up growth. As a result we saw the Canadian, Australian, and New Zealand dollars perform well, with the news from the world’s second largest economy seen as positive news for the export-reliant nations. We also saw significant developments from the People’s Bank of China (PBoC) midweek as the Governor announced the central bank would basically end “normal foreign-exchange market intervention” and in turn allowing the currency to float on the foreign exchange market. Yesterday we saw the Australian and Canadian dollars lose much of the ground they had made earlier in the week following remarks from the Governors of both central banks. The Japanese yen also slid following the conclusion of a central bank meeting in which it was decided that monetary stimulus will be continued, causing traders to sell of the traditionally safe-haven yen and buy into riskier assets such as Japanese stocks. Looking forward to today, we have monthly inflation and retail sales figures out of Canada. Get in touch with your trader for a live rate.