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US dollar declines versus “save haven” currencies frank and yen. The dollar is still under from pressure from ongoing concerns about slowdown in the U.S. and EU economies. Another pressure are speculations that the Fed may would provide more stimulus if needed.
The franc bounces back against the dollar. Today it was falling after the Swiss National Bank cut interest rates from 0.25% to zero yesterday.
The yen also corrects against the dollar. Today it plunged against all its major counterparts after Japan sold its currency in the foreign- exchange market for the first time since March to stem gains that threaten the nation’s economic recovery.
The euro sheds versus the dollar after ECB President Jean-Claude Trichet acknowledged a “particularly high” level of uncertainty said inflation expectations “must remain firmly anchored.” He said the ECB will offer banks additional cash as the region’s debt crisis spreads increasing pressure on policy makers to resume bond purchases.
Also today Italian 10-year bond spread over German 10-year Bunds widens to a new record of 391 bps. Both French and Belgium 10-year bond spread over German Bunds are at record wides.
The Canadian currency fell to the lowest level over 5 weeks amid declining crude oil prices, Canada’s biggest export.
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