Daily Market Outlook by AceTrader

Market Review – 20/04/2010 21:46GMT

Yen declines as central banks’ hints for rate hikes boost risk appetite

The Japanese yen weakened broadly on Tuesday as firmness in global stocks as well as expectations of rate increases in Australia and Canada brought return of risk appetite, spurring the demand of riskier assets and currencies linked to growth.

Versus the Japanese yen, the greenback maintained a firm undertone throughout Tuesday and hit an intra-day high of 93.40 on renewed risk appetites and cross-selling in yen. Eur/jpy rose from 124.48 to 125.64 while gbp/jpy surged from 141.56 to 143.53. Aud/jpy also rose sharply fm 85.42 to 86.96.  
The single currency moved narrowly in Asian morning before rising to 1.3523 after the release of better-than-expected German ZEW index which came in at 53.0 versus the economists’ forecast of 45.1. However, euro then fell to 1.3428 in NY afternoon before stabilizing. In other news, Greece sold 1.95 billion euros (US$ 2.63 billion) of 13-week T-bills with a bid-to-cover ratio of 4.6 and a yield of 3.65%.   
Canada’s dollar soared against the buck after the central bank stated that ‘it is appropriate to begin to lessen the degree of monetary stimulus’ and the usd/cad pair hit an intra-day low of 0.9970. The central bank kept interest rate unchanged at an all-time low of 0.25% as expected.   
Economic data to be released on Wednesday include:  Japan Leading indicators, U.K. Avg. earnings, U.K. Claimant count, U.K. ILO unemployment rate, Canada Wholesale sales.