A surge in interest for emerging markets had a negative effect on the yen, typically viewed by investors as a safe haven currency. This weakening is a blow to the yen, and a disappointment after it had reached two-month highs last week. There is unlikely to be much change today, given that there is no Japanese data due for release until the early hours of Thursday.
The Australian dollar strengthened yesterday against the pound after the nation’s reserve bank’s decision to halt interest rate cuts. The National Bank of Romania (NBR), on the other hand, cut interest rates to 3.5%, keeping up its policy to cut rates in the face of worsening inflation.
There were significant gains yesterday for the South African Rand and Mexican Peso, largely due to the poor manufacturing figures released from the US. Both currencies appreciated by over 1% in relation to the dollar after factory output figures were the weakest they had been in the US for 8 months.
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