Daily FX Wrap Up

Fundamentals Gone Wild.

It was a bit of an extreme day in the currency markets today, with the release of the Tankan survey of large manufactures this morning, the Japanese Yen made quick gains against its major counterparts. The survey was in line with expectations, rising to 25 its highest level in over a year. At todays open a slow but steady rise placed the Dollar near the monthly high however, upon hearing the Japanese news the Dollar took a sharp dive to the daily low of 117.45 only to pull out and finish the week near 118.20. While the USD has gained on the Yen, the Bank of Japan’s Governor Toshihiko Fukui has been very clear in his stance on the country’s prospects for growth. That said, the Governor might find it hard to act on his comments about raising rates it seems far more prudent to hold out until at least January, if not February, before pursuing monetary policy action. Many monetary policy officials have hawkishly commented that policy action is based on growth outlooks and not prior results. The only clear message we can bet on from the Bank of Japan is that within the next three months, there is a very good chance that rates will rise. XPRESSTRADE Analyst David Hilgeman