Published: 26 Sep at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, USA, Germany, Japan,
After gaining on the US Dollar throughout the week as Federal budget fears pushed investors towards safe-haven assets, the Yen snapped its bullish run.
Speculation surrounding the likelihood of Japanâ€™s government cutting corporate taxes lessened the currencyâ€™s appeal during Australasian trading and the Yen shed 0.5 per cent against the US Dollar and posted a notable decline against the Euro.
Investors are betting that the tax reduction will improve company profitability, and Asian stocks climbed as a result.
According to one New-York based strategist; â€˜The fact that youâ€™re seeing those corporate taxes being successfully cut has had a weakening effect on the Yen. The tax cuts are definitely seen as the government getting its way in terms of making the corporate sector more attractive.â€™
The Yen is likely to experience additional fluctuations following the release of domestic national consumer price figures.
Although markets have enjoyed a quiet day of trading compared with the same period of last week, movement occurred during the North American session following the publication of several pieces of influential US data.
Separate reports revealed that the US economy expanded by 2.5 per cent in the second quarter and the nationâ€™s initial jobless claims declined by more than expected. Although growth wasnâ€™t upwardly revised as forecast, it remained a decided improvement on the growth recorded in the first quarter.
While the â€˜Greenbackâ€™ strengthened against its peers in the aftermath of this data release, advances were pared as the nationâ€™s pending home sales increased by significantly less than expected, climbing 2.9 per cent in August, year-on-year, rather than the 6.3 per cent forecast. However, Julyâ€™s figure was upwardly revised t 8.5 per cent.
In other currency news, the Pound softened against the majority of its peers as the UK economy was shown to have expanded by less than forecast year-on-year.
Influential data releases to watch out for tomorrow include German inflation figures and the University of Michigan Confidence index.
As of Thursday, 26th September 2013, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1891, GBP USD exchange rate was 1.6038, and GBP JPY exchange rate was 158.8159.