The antipodean pair were the standout performers yesterday, with both the New Zealand and Australian dollars gaining against the majority of their peers. The Australian currency has had a very strong start to the year, advancing nearly 8% on the US dollar. With some of the highest interest rates of the developed nations, yesterday was a particularly good day. Overnight we had Australian employment figures released which came in as expected and showed unemployment holding at 5.9%. New Zealand did increase their interest rates by 0.25% to 3%, the third increase this year, which saw the New Zealand dollar gain across the board.
The Japanese yen also advanced yesterday amid market speculation that the Bank of Japan will refrain from expanding stimulus levels. Central bank policy-makers congregate for meetings today – running through to tomorrow – in which they will discuss monetary policy strategy, moving forward. Traders yesterday were betting on a general consensus not to add further stimulus measures, boosting demand for the Japanese currency. The Turkish lira declined yesterday, dropping off over a percent against the US dollar amid reports from certain news channels that al-Qaeda militants breached the Turkish consulate in Iraq and took hostages. Later today we have a speech from the governor of the Bank of Canada.
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