Updated on: 10-09-2010The U.S. dollar and yen are staging a broad retreat on Friday after yesterday’s gains in both currencies near the end of the North American session. The risk picture is fairly constructive for equities, and major currencies are managing gains on the back of higher stock prices.
USD/JPY moved higher in the aftermath of Japanese Q2 GDP being revised higher, as expected, with the economy growing 0.4% on the quarter and an annualized 1.5%. Preliminary estimates had been for 0.1% and 0.4% growth rate s respectively.
Also of interest was Japanese Prime Minister Naoto Kan unveiling a ¥915 billion stimulus package to bolster the economy, however the markets appear to have discounted the plan as too small to have any meaningful effect.
In addition, Japanese Finance Minister Yoshihiko Noda told reporters that with the U.S. and euro zone unlikely to cooperate with Japan to sell yen and buy their own currencies, the administration has been trying to convince nations to not counter a possible FX intervention by the government to weaken the yen.
Despite all of this, USD/JPY is higher on the day, picking up roughly 0.2% on the day.
The Canadian dollar is also making some headway on the back of news that 35.8k jobs were created in August, more than calls for a 30.0k increase and reversing a 9.3k slide in July. The unemployment rate nevertheless moved up to 8.1% despite calls for no change to the prior 8.0% level.
Friday is looking light for North American traders with only a speech from Bank of Canada Governor Mark Carney just two hours after the North American open.
Canadian dollar traders are curious to see whether or not the central bank is indeed open to hiking rates further, or if the current 1.00% interest rate is here to stay.
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