Currency roundup: Euro soars as Yen plummets, Pound weakens

Published: Friday, 18 January 2013 10:00 BST - Written by Tim Boyer

STORY LINK Currency roundup: Euro soars as Yen plummets, Pound weakens

Currency roundup: Euro soars as Yen plummets

The Euro has strengthened close to a 10-month high against the US Dollar after Spain’s borrowing costs fell during a €4.5 billion sale of government bonds boosting confidence in the European debt markets.

As a result the single currency strengthened against all 16 of its major peers whilst the Japanese Yen plummeted to its weakest level since 2010 against the US Dollar. The Yen’s fall is being boosted by the Bank of Japans revelation that it will be implementing an easing of monetary policy next week.

The Yen touched a 2 1/2-year low against several of its rivals and hit a four year low against the Australian and New Zealand Dollars, and was set for a 10th weekly decline after an adviser to Japan’s Prime Minister Shinzo Abe signaled a preference for the yen at about 100 per dollar. Japan’s two-year note yield slid to a seven-year low as BOJ Governor Masaaki Shirakawa, Finance Minister Taro Aso and Economy Minister Akira Amari met amid speculation the BOJ will boost bond purchases.

Elsewhere, The Pound has continued to weaken against the Euro due to investor concerns over the UK’s AAA credit rating and the uncertainty surrounding the country’s relationship with the European Union. Many economists are predicting that the UK’s much valued AAA rating will be cut thanks to worries over the country’s weak economic recovery.

A series of disappointing data releases has done little to bolster confidence. Fitch ratings agency has warned that the UK's top-notch sovereign credit rating could be cut if the Chancellor of the Exchequer's March budget shows debt levels continuing to rise.

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