The Japanese Yen gained ground today as central banks of major currencies, such as the Pound Sterling, Euro and the Australian Dollar, are expected to cut interest rates during this week and as the result, their currencies fell.
The Bank of England, European Central Bank, and the Reserve Banks of Australia and New Zealand, respectively, are all expected to reduce interest rates by at least 50 basis points, thus reducing the yield advantage these currencies have over the low yielding Japanese Yen.
According to analysts these four central banks will reduce interest rates aggressively to curb the possibility of deflation and stop the global financial market problems from affecting their economies.
On December 1, 2008 at 08:50 GMT the U.S. Dollar was down by 0.7% against the Japanese Yen and traded at 94.75 Yen, while the Euro fell by 1.1% against the Japanese Yen and traded at 119.85 Yen. The Euro was also fell by 0.4 % against the U.S. Dollar and traded at $1.2641; meanwhile, the Pound Sterling fell by 1.3 % against the U.S. Dollar and traded at $1.5191.