Yen Weakened As Risk Appetite Returns

The Yen weakened against the troubled Euro on Friday and the US dollar also weakened due to the dismal job figures. The US has posted the highest job losses in 16 years and many corporations are announcing further job cuts. Interbank Forex markets have reacted to last week’s news from the UK, the US, and the Euro Zone.

British Pound Rises

The British Pound rose on Interbank Forex markets amid speculation that rate cuts by the Bank of England would help to stimulate the troubled UK economy and help it to recover faster than the Euro Zone. The Japanese Yen fell for the second week in a row as Interbank Forex brokers bet that the proposed stimulus package will pass in both houses of Congress and help the US to recover and revive investor confidence.

Interbank Forex Reacts to Risk Appetite

There has been a return to risk appetite and Interbank Forex markets have reacted to the detriment of the Yen which is traditionally seen as a safe haven currency. Bob Parker of Credit Suisse stated, “We are going to see the yen start to reverse. The yen was the strongest currency in the world over the past five months.” The Yen fell 3.1% against the Euro to 118.85. The Yen also fell 2.1 against the US dollar to 91.89. The Euro actually gained 1% against the dollar to $1.2940.

Geithner To Announce Bank Rescue Plan

On February 9th US Treasury Secretary Timothy Geithner will announce his plan to aid the troubled US banking sector, a move that will be watched closely by Interbank Forex brokers. Many believe that the plan will guarantee toxic assets held by banks instead of creating a special ‘bad bank.’

ECB Holds Rates Steady

The European Central Bank held rates steady at 2% but indicated that next month the bank will cut rates by half a percentage point. The failure to cut rates was not popular with some Interbank Forex traders. Last week was a busy one on Interbank Forex markets. Economic data was released from the Euro Zone, the UK, and the US and kept Interbank Forex brokers occupied. Stock markets were up around the globe but it remains to be seen how this will affect Interbank Forex markets in the near future.