FX weekly news

Over the course of last week the Japanese Yen gained huge momentum thus the yen may extend gains against the U.S. dollar as Japanese investors start selling some of their more than $1.3 trillion in overseas assets to bring money home because of a global slump in equities The yen may advance to 95 per dollar should Japanese investment trusts, insurance companies and pension funds start selling foreign holdings, wrote Tohru Sasaki, chief strategist in Tokyo at JPMorgan and a former chief currency trader at the Bank of Japan, in a research note dated Oct. 10.

The bank of England is expected lower borrowing costs again after cutting the main rate by half a percentage point on Oct. 8, in concert with other major central banks worldwide. ``Developments have become so serious that the authorities have had little option but to act more aggressively,'' Paul Robinson, a currency strategist in London at Barclays Capital and a former Bank of England economist, wrote in an investor note Oct. 10. ``So far, it does not appear to have been enough.''

The euro rose the most in three weeks against the dollar on October the 13th after European leaders agreed to guarantee bank borrowing and prevent failures that would further batter the credit markets. Europe's single currency also strengthened versus the yen as leaders of the 15 countries using the euro endorsed bailing out ``systemically'' critical banks in distress.

The Australian currency rose the most since it began freely trading after the nations' governments guaranteed bank deposits and European leaders agreed to back bank debt. Australia's currency advanced against the yen after leaders of the 15 countries using the euro agreed to guarantee bank borrowing and use government money to prevent big lenders from going under, prompting speculation investors will resume buying the nations' high-yielding assets using funds from Japan.