The Yen fell amid speculation that major central banks from around the world may soon implement measures to bolster economic growth. The forecast of fresh easing measures also caused the U.S. Dollar to weaken versus its major Forex exchange peers. The greenback remained under pressure after Monday’s economic releases showed that Manufacturing contracted for the first time in three years, thereby increasing the possibility that the Federal Reserve may opt for another round of quantitative easing.
The Canadian Dollar advanced versus the majority of its counterparts as crude oil, the country’s biggest export, rose to $88.04 a barrel. The Loonie reached a six-week high versus the U.S. Dollar on the possibility that European and Chinese central banks may implement stimulus to shore up growth. The Canadian Dollar was also supported by expectations the ECB ay cut the costs of borrowing money.
Other FX trading reports revealed that the Australian Dollar traded at a two-month high versus the greenback following the release of official data showing an increase in Home Building approvals for May. This suggests that the economy is expanding. The Aussie pared gains after the Reserve Bank of Australia left the interest rate unchanged. The New Zealand Dollar rose versus the Yen as stocks gained for a fifth consecutive day, thereby fueling demand for high-risk assets.
In the U.K., an index confirmed that Construction diminished in June, causing the British Pound to decline against most of the Forex majors while raising the possibility the Bank of England will expand its bond purchase program by 50 billion Pounds.