Safe Haven Appeal High after IMF

The Euro slipped to its lowest level in more than 1-week against the U.S. Dollar and Japanese Yen as investors returned to the safe haven assets following the release of the IMF’s global growth forecasts which was unexpectedly lowered again. The IMF said that they have lowered their forecasts for this and next year and called upon the U.S. and the Eurozone to work harder to ensure that there is no further deterioration in those regions which are key to propping up the rest of the world. One analyst stresses that what is significant is that the IMF is generally very cautious and conservative in their forecasts and this report was clearly neither.

As reported at 12:32 p.m. (JST) in Tokyo, the EUR/USD pair was trading at $1.2840, a drop of 0.3% and the lowest level since October 1st, and is approaching the 200-day average of $1.2822, a key support level. Analysts believe that key level will be tested and possibly broken which would trigger more selling.

Growth linked currencies were also hard hit, with the Australian Dollar moving lower against both the Dollar and the Yen; the AUD/USD pair was trading at $1.0200, a drop of 0.1%, not far from the 3-month trough of $1.0149 struck on Monday.