Forex News and Rumors – Afternoon Update

IMF Warns Recovery “Will Not Be Simple”

The International Monetary Fund (IMF) said today that while the world has begun to recover from recession, full recovery is still some ways off and is fraught with many potential obstacles.

The recession had “left deep scars, which will affect both supply and demand for many years to come” said IMF chief economist, Olivier Blanchard. More

Euro Gains on Dollar, Yen

German investor confidence pushed the euro into positive territory against the dollar and the yen for the first time in three days.

“Economic growth looks better, and capital flows into commodity-sensitive currencies,” said Warren Naphtal, who oversees $870 million in assets as the chief investment officer at P/E Investments in Weston, Massachusetts. “For the flight-to- quality trade to be taken to the next level, you really need very negative news.” More

China Reduces US Debt Holdings

China – the number one holder of US debt – cut back on its US holding by 3 percent in June. China has been very vocal in its fears that recent US government policies have reduced the value of the dollar. More

Commodities, Oil Lift Canadian Dollar

The Canadian currency, nicknamed the loonie, appreciated to C$1.1040 per U.S. dollar at 1:47 p.m. in Toronto, from C$1.1086 yesterday spurred on by a rebound in commodities and oil prices.

“The market is watching equities,” said Jonathan Gencher, Toronto-based director of foreign-exchange sales at BMO Capital. “Canadian dollar-U.S. dollar is a little bit of a side story.” More

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