Commodity backed currencies benefit from no US tapering

Elsewhere yesterday markets were tentative ahead of last night’s Federal Reserve monetary policy decision. After a strong few weeks, we saw the Australian and New Zealand dollar give back gains against their US counterpart, as traders placed their bets ahead of the Fed’s decision as a tapering of monetary stimulus would be bad news for the export-reliant nations. The New Zealand dollar showed the biggest losses, falling against all of its major peers, as the country’s finance minister announced that a weakening of the currency would be beneficial. We also saw the Canadian dollar lose out, as nervousness leading up to the Fed’s announcement reduced demand for the high-risk asset. Similarly we saw the Japanese yen fair well, with traders buying in to the safe-haven currency. Of course of all this went into quick reverse as the decision of the Federal Reserve not to taper their programme of quantitative easing surprised the markets. Today we have a statement from the governor of the Bank of Japan, and a Swiss short-term interest rate decision and monetary policy assessment. All three will be influential, but the main point of interest will be the on-going market response to the Federal Reserve’s decision last night. Get in touch with your trader for live rates