The Australian dollar managed to gain versus

lower-yielding currencies before a report to be released this week in the country is likely to show an advance in inflation in the last year’s last quarter, helping speculations that a series of interest rates in the country will restart.

The Aussie rebounded after losing versus most of lower-yielding currencies last week as risk aversion remained predominant in majority of trading hours. Investors in the South Pacific region are waiting an inflation report to be released on Jan 27th expecting positive numbers as forecasts suggest an advance for the country’s prices in the last quarter of 2009, which would provide grounds for a new series of interest rate hikes by Australian policy makers.

AUD/USD traded at 0.9053 as of 00:09 GMT from a previous rate 0.9034 when markets opened Sunday evening.

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The South Korean currency, one of the best performers in 2009 among Asian emerging markets, had a severe weekly decline as risk aversion remained predominant after China’s statements regarding new regulations on its economy.

After China announced it will take further measures to control inflation in the country, which can be understood with implied slower economic growth, the South Korean currency declined versus most of its main trading partners currencies, as was the worst performer in the Asian region this week in foreign-exchange markets.

USD/KRW ended the week at 1,152.50 from an opening rate of 1,136.2 this Friday.

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After losing significantly during most of this Wednesday’s session as risk aversion prevailed globally, the kiwi rebounded in currency markets as retail sales advanced in the country reviving the confidence regarding the Southern Pacific economy.

The New Zealand dollar had its worse decline in two months this Wednesday as consumer prices showed negative figures, but a retail sales report published in this Thursday early morning in the country revived confidence in the currency as figures came better than forecasts suggested.

NZD/USD traded at 0.7227 as of 12:51 GMT from as low as 0.7185 hours earlier.

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The Brazilian real touched the weakest level in a month as risk aversion remained predominant in today’s trading session globally, since equities and commodities markets continued to follow a bearish trajectory in most of the

key-economic regions around the world.

Brazil’s real suffered another impact today as China’s lending restrictions announced last week continue to influence risk levels in trading markets globally. Commodities, responsible for a good share of Brazil’s international trade continued to tumble in Asia and Europe, decreasing attractiveness for the real which lost sharply versus a more appealing U.S. dollar as traders searched for safety.

USD/BRL closed at 1.7895 today from an opening rate of 1.7715.

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The Canadian dollar ranked among the worst performers in currency markets today as risk aversion influenced commodities and equities trading, which are strongly related to the loonie’s rates as weak economic data in the country also influenced the confidence towards Canada’s currency.

Speculations that interest rates hikes would happen anytime soon in Canada faded further away as consumer prices retreated according to a report published today, which forced the loonie down in a day were demand for raw materials declined, affecting the outlook for the Canadian economy as half of the country’s exports are commodities. The U.S. dollar advanced sharply versus its Canadian counterpart ask risk aversion brought traders to purchase safer assets in the world’s wealthiest nation, pushing the loonie away from parity with the greenback this Wednesday in foreign-exchange markets.

A considerable amount of strength in the loonie’s rally since the beginning of the year was based on the fact that a fast paced recovery would improve odds of interest rate hikes by the Bank of Canada, which has not been confirmed or signaled by the Canadian financial authorities so far, decreasing attractiveness for the loonie. Today, the commodities market was also bearish, affecting demand for Canadian raw materials and causing a double impact on the loonie rates.

USD/CAD traded at 1.0472 as of 19:23 GMT from a previous rate of 1.0314 yesterday. CAD/JPY traded at 87.06 from 88.39.

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The dollar gained today versus most of the 16 main traded currencies as China tightened its lending restrictions, raising risk aversion in

foreign-exchange markets affecting high-yielding currencies the most, as investors search for safer bets.

The U.S. currency continue yesterday’s advance as risk aversion coming from Asia is still playing a major role in market sentiment this week, and the safety provided by assets in the country became one of the best options for these turbulent trading sessions. The euro was one of the biggest losers versus the dollar touching the lowest rate in 2010 today after International Monetary Fund officials affirmed that Greece’s situation is serious, once again making the Southern European nation to affect the outlook for the bloc’s single currency. The New Zealand dollar declined as a report in the nation showed that consumer prices dropped in the country, surprising analysts.

Chinese’s new policy regarding loans to avoid a new credit bubble is decreasing risk appetite, and events in Europe aren’t good either, this is allowing the dollar to outperform most of its trading partners currencies, as the U.S. provided relatively good data today, as analysts affirmed.

EUR/USD bottomed at 1.4095 as of 17:17 GMT from a previous rate of 1.4272 yesterday. NZD/USD traded at 0.7190 from 0.7387.

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The Canadian dollar started another week trading high versus its U.S. counterpart as markets that influence its rates rallied in the start of this week, specially energetic and metallic commodities, before tomorrow’s interest rate decision in the North American nation.

After a rather bearish past week for the crude oil which posted consecutive days of losses as risk aversion rose in Europe and China, the Canadian dollar benefited from a rebound in the oil rates today, as future contracts advanced for the first time in six days. Canada is also a metallic commodity exporter, and as the copper advanced together with stocks in Europe, the loonie advanced significantly versus the greenback in a rather calm trading session due to a bank holiday in the United States. Commodities and equities rates fueled by risk appetite are maintaining the Canadian currency among the best performers this year in foreign-exchange markets.

Analysts remain very confident that the rally in commodities will set the loonie to parity with its U.S. counterpart at some point this year, as the global economic recovery is likely to push the oil and metals up, as manufacturing sectors in Canada’s main trading partners are increasing demand for raw materials by the day.

USD/CAD traded at 1.0254 as of 14:49 GMT from a previous rate of 1.0293 when markets opened yesterday. CAD/JPY advanced to 88.44 from 88.07.

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This Friday’s shift in market sentiment allowed the U.S. dollar to post a weekly advance versus most of the main

higher-yielding currencies, as risk aversion rose globally and traders opted by the relative safety provided by dollar-priced assets.

The dollar gained significantly versus commodity producer currencies like the Brazilian Real and the Australian dollar towards the end of this week as China’s new lending restrictions raised concerns that demand for raw materials may decline in the country, affecting exports from these countries. The dollar also reverted a losing trend versus the euro and ended the week with a positive result as some of its member countries increasing budget deficit are raising speculations that the currency attractiveness may be impacted among traders, making the European single currency to drop sharply in this week’s last trading session.

Even if economic data published in the U.S. during this week was below forecasts, pessimism was stronger and allowed not only the dollar, but also the yen to outperform most of main trading currencies towards the end of the week. Fed rate hikes speculations declined significantly, but the dollar may continue to sustain its current levels as uncertainty regarding the global economy remains considerable.

EUR/USD closed the week at 1.4381 from 1.4505. NZD/USD closed the week at 0.7368 from 0.7424 on Thursday.

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The Australian dollar was one of the most affected currencies today as speculations that Chinese lending requirements will slow down the global economic recovery impacted traders’ sentiment, declining appetite for

high-yielding currencies.

The Aussie and the kiwi declined today versus most of the main 16 traded currencies, after one of its main trading partners, China, is likely to reduce property loans after the government set new restrictions for lending money in the nation’s banks, fueling speculations of an economic slowdown and consequently raising risk aversion in trading markets towards the end of this week’s session.

AUD/CAD traded at 0.9502 as of 19:02 GMT from a previous rate of 0.9525 yesterday.

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The Canadian dollar declined versus its U.S. counterpart and

lower-yielding currencies as risk aversion rose impacting markets with extreme influence in the loonie rates, those of raw materials and equities, which dropped globally this Friday.

The loonie was impacted today as energetic and metallic commodities declined, specially the crude oil, as raw material exports account for more than half of the country’s international trade revenue, in a day of bearish markets in New York and Toronto. China’s new tightening lending policy declined appeal for high-yielding currencies, and despite U.S. mediocre data published in reports this Friday showing a slow down in the country’s inflation, the greenback advanced versus the loonie after touching a three-month low earlier this week.

The Canadian dollar has been fluctuated in almost perfect correlation with commodities in the beginning of 2010, despite the country’s fundamentals, which are also adding confidence for the loonie to gain in currency markets, according to analysts. As the crude oil retreated below $80 a barrel, the loonie’s rally was halted, but may continue if risk appetite returns during the next weeks.

USD/CAD traded at 1.0284 as of 16:38 GMT after touching 1.0219 yesterday. CAD/JPY declined to 88.27 from 88.85.

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The Canadian dollar had its rally towards parity with its U.S. counterpart halted after a monthly trade deficit was posted today, raising doubts that the nation’s economy is not going as good as some analysts like to believe.

The loonie had a disappointing surprise today as Canada posted a trade deficit of more than $300 million while forecasts suggested a surplus of $500 million, surprising traders and affecting the outlook of one of the best performing currencies so far in the beginning of 2010. The Canadian dollar had profited so far this month from high risk aversion and an increasing demand for the nation’s commodities, which influenced the Canadian economic expectations, impacted today showing traders that Canada’s resilience is not as high as previously imagined.

Doubts regarding the overconfident Canadian economic outlook helped other currencies to pare losses versus the loonie, specially its U.S. counterpart, which jumped from the lowest rate almost 3 months versus Canada’s currency. Monthly reports can be deceiving thought, as seasonal adjustments may hide the actual economic scenario of a country, which is the case of Canada, is still above the average.

USD/CAD traded at 1.0362 as of 16:39 GMT from a previous rate of 1.0334. CAD/JPY tumbled to 87.59 from 89.09.

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Risk aversion declined significantly today after China set a new reserves requirements for banks in the country, allowing the yen to outperform all of the 16 main traded currencies in

foreign-exchange markets, as pessimism surged.

Equities markets in Asia and globally declined today, raising demand for the yen, as China set a minimum of 16 percent of reserves that large banking corporations in the country must have, in order to avoid a credit bubble as the one that caused the global slump in late 2008. The yen is considered the safest refuge in currency markets for turbulent times and benefited from today’s negative scenario, as China’s policy decreased demand for high-yielding assets, which were trading high since the beginning of the year. The Australian dollar posted the sharpest losses versus the Japanese currency as loan approvals in the real estate sector declined.

China’s strict regulations declined optimism that were fueling demand for higher-yielding since the last week, according to analysts. The yen had declined significantly after several sessions losing versus most currencies, as today’s shift in markets sentiment was a good opportunity for it to level up.

AUD/JPY fell to 84.23 as of 15:45 GMT from a previous rate of 85.53 in the intraday comparison. CAD/JPY followed the same trend at 87.72 from 89.08.

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The kiwi dollar struggled on Friday enabling the pound to jump 1.4%, briefly nearing the 2.30 level, as risk appetite in the market waned.

• Higher-risk currencies struggled to make headway at the end of last week as the rally in global equities in the wake of the positive US GDP data came to an abrupt halt.
• As global stocks fell, investors sought shelter in the haven currencies fuelling a sell-off in the higher-yielding kiwi dollar, buoying the sterling price.
• In trading this morning, the New Zealand dollar has pulled back from six-week lows against the pound, with profit taking in high-yield currencies taking a pause.
• Support has also come from improved manufacturing data in China, a key importer of New Zealand goods, which has outweighed some of the negative sentiment toward the currency.
• Analysts have noted though that reduced support for a rise in interest rates and lower risk appetite may prevent the kiwi from regaining its strong valuation.

The pound climbed just over two cents against a broadly weakened aussie dollar on Friday with a rise in risk aversion putting selling pressure on the higher-yielding currency.

• Weak data in the US and plummeting global equity markets enable the pound to gain as investors took the opportunity to cash profits in the aussie and retreat to safer assets.
• Analysts have recently noted that the rally in risky assets could come to an end. Conditions for perceived riskier assets to gain requires a flow of positive economic data combined with loose global monetary policies and low interest rates.
• The strong US GDP figure supported the rally in higher-yield currencies, but as the economic recovery shifts the balance in favour of tightening policy, it will likely signal the end of the rally in risky assets.
• However, the aussie is trading strongly again this morning, currently up over a percent, as investors bet that the Reserve Bank of Australia will raise interest rates at their meeting on Tuesday.
• Traders also said that Chinese data showing manufacturing activity at an 18-month high helped to mitigate some of the recent loss in risk appetite, bolstering aussie demand.

The greeback pulled back from its sharp sell-off on Thursday, as weak US economic data spurred a return to risk aversion.

• In early trading, the dollar continued to lose ground following the better-than-expected US growth data, however the GBP/USD rally was capped at 1.6600, and the UK currency pulled down steadily, eventually closing down 0.6% ay 1.6448.
• US markets went through losses on Friday, with financials and materials leading the path, as risk aversion returned after Thursday’s optimism, strengthening support for the greenback.
• On the macroeconomic front, data revealed that US consumer spending declined 0.5% in September, the largest decline since December 2008, further buoying the dollar rally.
• Positive manufacturing data from the Midwest in the afternoon failed to dent dollar buying in the markets and traders acknowledged that part of this may have been due to month-end flows into the US currency related to foreign portfolios.
• The US currency has continued to climb in trading this morning, currently half a percent up, as investors remain cautious ahead of big events this week, including interest rate decisions in the UK, eurozone and US.

Better-than-expected GDP figures in the US caused risk appetite to surge across the board enabling the kiwi to post gains of over a cent against the pound.

• The solid GDP figure in the US renewed optimism about recovery in the global economy, prompting investors to buy higher-yielding currencies.
• The kiwi, which has suffered recently on a rise in risk aversion, was able to reverse losses as the positive data encouraged investors to buy up riskier assets.
• However, in trading this morning, the pound is recouping losses, pushing the price back near 2.27 as market participants return their thoughts to the RBNZ’s rate statement on Wednesday where they indicated that interest rates would not be raised for some time.

Sterling reversed a three-day decline against the kiwi, posting marginal gains following a rise in risk aversion, closing the day at 2.1682.

• It was a choppy session for sterling, which initially dropped to a low of 2.1476 in early trading, as a lack of major economic data gave support to the higher-yielding currency.
• However, having dipped, the pound rebounded strongly, regaining over two cents as global equities backed off to trade in the red.
• Weak European stocks were followed in by the US markets, easing risk appetite and allowing the UK currency to stabilize in the afternoon, consolidating its position above 2.1650.
• In the early hours of this morning, the pound relinquished its gains as the kiwi found support from strong employment data from its neighbour Australia, and as higher Asian equities reaffirmed demand for the New Zealand dollar.
• However, the pound has found broad support as the European markets open, with the price currently hovering just below 2.17.

The pound slid against the dollar on Friday, completing its third straight weekly decline, as demand for the haven currency found support from weak US employment data.

• In early trading, risk appetite was down, with investors taking up defensive positions ahead of an expected rise in US unemployment figures.
• However with weak data already priced into the market, the pound avoided a further sell off after data confirmed an increase in jobless figures that brought overall unemployment in the US to 9.8%.
• The data did trigger a sharp fall in major stock indices, with traders concerned that the global recovery is struggling to find momentum.
• However, the pound was able to pick itself up from a four-day low of 1.5807 against the dollar, clawing back some of its losses, as European equities rallied slightly, to close the week at $1.5944.
• The price is holding steady this morning, having made initial gains after the G7 meeting over the weekend brought no talk of re-evaluating the strength of the US dollar.

Sterling gave back recent gains against the euro on Friday, losing 0.3% as risk aversion weighed heavily on the fragile UK currency.

• Sterling struggled in the morning as investor’s booked profits after the pound’s gains against the euro on Thursday, but trade was initially range bound ahead of US payrolls data.
• The pound also failed to gain traction after a Nationwide housing market survey showed prices were steady on the year in September, the first time since March that prices have not fallen on a year-on-year basis.
• In the afternoon, US payrolls data disappointed expectations, justifying the rise in risk aversion in the market and sending global equities spiralling further downward.
• Indeed, the FTSE 100 went back below the psychological 5000 level, which was particularly damaging for the pound
• In trading this morning the price has continued to climb in the single currency’s favour, though sterling may find support should UK services meet expectations and reveal a stronger month on month figure at 09:30BST.