Safe haven currencies up

Published: 24 Oct at 9 AM Tags: Euro, Dollar,

The safe haven currencies have enjoyed a spike as risk appetites declined following an increase in interest rates in China’s money market.

The yen, Swiss franc and dollar were all up on Wednesday after September’s jobs data for the US made it increasingly likely that the Federal Reserve will keep its stimulus programme active for at least the rest of the year.

The Canadian dollar has dropped following an announcement by the Bank of Canada that interest rates are unlikely to rise anytime soon because of weaker than expected economic growth. The euro is currently flat at $1.3778.

Elsewhere the commodity currencies have fallen against the dollar. The Australian dollar is down 0.8 per cent to $0.96.29 and the New Zealand dollar has also fallen by 1.5 per cent to $0.8385. Demand for the yen has put pressure on the US dollar and the euro. The greenback is currently trading at 97.31 yen, a drop of 0.8 per cent and the single currency is down 0.9 per cent at 134.06 yen.

According to Reuters research, a number of top dealers in the US think it is unlikely that the Fed will begin to trim its massive bond buying programme until March next year. This is likely to keep pressure on the dollar for at least the foreseeable future.