The following data were published:
04:30 Japan Industrial output (September) final 1.1%
04:30 Japan Industrial output (September) final Y/Y 0.2%
07:00 Germany GDP (Q3) flash -0.5%
07:00 Germany GDP (Q3) flash Y/Y adjusted 0.8%
07:00 Germany GDP (Q3) flash Y/Y unadjusted 1.3%
The euro fell to a two-week low against the dollar after Germany's
economy entered its worst recession in at least 12 years, sparking
speculation the European Central Bank will cut interest rates.
The 15-nation currency also pared gains against the yen after a German
government report showed the biggest contraction over two consecutive
quarters since 1996. The yen dropped versus the dollar as intervention
by the Reserve Bank of Australia fueled speculation other central banks
may follow suit.
The yen fell from two-week highs against the dollar and the euro after
the Reserve Bank of Australia intervened to support its currency,
fueling speculation Japan may do the same.
The yen declined versus the Australian dollar, after yesterday surging
the most in three weeks, as an unidentified spokesman at the RBA
confirmed purchases of its own currency. Japan's Finance Minister
Shoichi Nakagawa told lawmakers in Tokyo today that abrupt currency
moves are ``undesirable'' and a stronger yen hurts domestic stock
investors. He said last month Japan may intervene for the first time in
four years.
The yen rose earlier to a two-week high against the euro, after U.S.
Treasury Secretary Henry Paulson's plan to divert bailout money from
banks sparked cuts in purchases of higher- yielding assets. Paulson
said yesterday he plans to use the second half of the $700 billion
Troubled Asset Relief Program, known as TARP, to help relieve pressure
on consumer credit, scrapping a proposal to buy devalued mortgage
assets from banks.
The Japanese currency will strengthen to 90 yen per dollar in three
months as traders shun higher-yielding assets deemed riskier, Goldman
Sachs Group Inc. said, revising earlier forecasts. The euro will fall
to $1.20 per euro in the same period, Goldman said. The previous
three-month projection was for the dollar at 112 yen and $1.45 per euro.
The Australian dollar rose after an RBA spokesman confirmed the central bank bought its own currency today.
EUR/USD the pair has become stronger from area $1,2380 having
established that a session high in area $1,2590, later a rate has
slightly decreased.