RATES FORCE JAPANESE TO LOOK ABROAD
Japanese households are choosing to send their savings overseas at the fastest pace since 2007 as they seek out higher yielding assets. With benchmark interest rates only 0.1 per cent in the Asian country, investors are choosing to buy Chinese stocks and Brazilian bonds to gain exposure to high-yielding emerging market assets. Currency strategists consequently expect the yen to fall 8 per cent against the greenback by the end of this year.
FED’S EVANS SAYS NO CHANGE TO STANCE
The president of the Federal Reserve Bank of Chicago, Charles Evans, yesterday said that the US central bank is likely to maintain an accommodative interest rate stance for at least six months. He said: “I would expect it will hold for the next three or four meetings, that’s about six months,” adding that he would not be surprised if it continued into 2011.
UBS RAISES ITS SWISS FRANC FORECAST
Swiss bank UBS has raised its forecast for the euro-Swiss franc currency pair, predicting that one euro will cost SFr 1.40 in three months time, compared to SFr 1.45. The change came just hours after Swiss National Bank president Philipp Hildebrand said the central bank was ready to act decisively to counter excessive franc gains after the currency rose to a 10-year high against the euro.
GREEK WORRIES CAUSE EURO WEAKENING
The euro weakened against the US dollar yesterday after a Greek report said the country was not optimistic about receiving aid from Eurozone members at a European summit later this week. The publication sparked renewed concerns about Greece’s sovereign debt problems.