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NBC Daily Forex : June 13, 2013

ByThe National Bank of Canada
Published 06/13/2013, 03:33 AM
Updated 05/14/2017, 06:45 AM
JP225
-2.26%

We are not talking about the first game of the Stanley Cup Finals (which went into triple overtime) but rather about Asian markets that, after a lull on Wednesday, caused trading screens to go red. Still in reaction to the Bank of Japan’s decision to stay the course the quantitative easing program, the Nikkei 225 plummeted by 6.4%. The index then went down by 21% since its recent highs, and back below its levels before the BoJ’s intervention in early April.

Let’s hope this is not a sign of what is to come for the U.S. stock market when the Fed winds down its program. The World Bank does not think so. Its semi-annual report is upbeat about global prospects; less concerned about market volatility, it believes that the impact of withdrawing asset-buying programs will be short-lived. In the World Bank’s opinion, the global economy now finds itself in an inverted plateau with the stagnation period coming to an end: it forecasts international growth of 2.2% this year, 3.0% in 2014 and 3.3% in 2015.

The alert scenario should favour the yen and the USD (so far the yen has gained more than 2% against the USD, the euro’s rise has slowed, the CAD remains strong.

Benoit Marcoux

Range for the day: 1.0150-1.0230

Economic Data

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