It has been a week of two halves for the Japanese yen, which started on sure footing following a poor weekend for the global stock market, which heighted demand for the traditionally safe-haven currency. This strength carried through the first half of the week, with the Japanese yen holding at 3-month highs into Wednesday, then making further ground on Wednesday following the release of better-than-forecast trade balance figures. However, yesterday’s Chinese manufacturing figures reversed these gains, with the figures from the world’s second largest economy coming in ahead of forecast and boosting confidence in the global market. As a result we saw the yen decline, and higher-risk assets such as the Australian dollar and the South African rand perform well.
Another big mover was the Indian rupee, which climbed to 11-month highs on Tuesday. Election results showed a landslide victory for the Bharatiya Janata Party, whose policies focus on reigniting economic growth in India. These were the clearest election results in three decades, thus boosting confidence in the Indian market. Looking forward to today we have inflation figures out of Canada.
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