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Foreign Exchange Market Update

April 17, 2014
 
Indicative Interbank spot sell rates only as of 08:40 AM PST.

PLEASE CALL THE FX DEPARTMENT AT (626) 279-3235 FOR THE MOST CURRENT RATE

AUD/USD----0.9359
NZD/USD----0.8608
EUR/USD----1.3855
GBP/USD----1.6830

USD/CHF----0.8790
USD/JPY----102.01
USD/CAD----1.0970
USD/TWD----30.128
USD/CNY----6.2162 (onshore)
USD/HKD----7.7522
USD/SGD----1.2488
 
The U.S. dollar fell the most in a week against a basket of major peers on speculation the Federal Reserve will move slowly to raise interest rates as the world’s biggest economy expands. Fed Chair Janet Yellen said yesterday she doesn’t see any sign of inflation and has a “continuing commitment” to support the U.S. recovery. The dollar declined 0.2 percent to $1.3837 per euro, paring a weekly gain to 0.4 percent. The U.S. currency was little changed at 102.20 yen after gaining 0.7 percent during the previous four days.
 
The British pound rose to the highest level in more than four years against the dollar as Federal Reserve Chair Janet Yellen signaled the U.S. central bank will keep an accommodative monetary policy that has weakened the greenback. Sterling appreciated to the strongest in six weeks versus the euro after a U.K. government report yesterday showed the jobless rate dropped below 7 percent. Bank of England Governor Mark Carney has said that was the threshold for policy makers to start considering raising interest rates. The Bank of England will this week release the minutes of its April policy meeting, where it left interest rates at a record-low 0.5 percent. U.K. government bonds declined. The pound rose as much as 0.3 percent to 1.6842 U.S. dollar, the highest level since November 2009 before trading at $1.6812, up 0.1 percent.
 
The euro rose to session highs against the broadly softer dollar on Thursday as dovish comments by Federal Reserve Chair Janet Yellen curbed investor demand for the greenback. The euro touched session highs against the U.S. dollar of 1.3864 and was last up 0.29% to 1.3856.  In the euro zone, data on Thursday showed that German producer price inflation fell 0.3% in March from a month earlier and was down 0.9% on the year. This was below expectations for a 0.1% increase on the month and a 0.7% decline on the year. The report came a day after data confirmed that the annual rate of euro zone inflation slowed to 0.5% in March, the lowest since November 2009.Core inflation, which strips out volatile items like food and energy costs, fell to 0.7% from 1.0% in February, matching the record low reached in December 2013. Euro zone inflation has now been in the European Central Bank's danger zone of below 1% for six straight months, fuelling speculation that policymakers will need to implement fresh stimulus measures to shore up the fragile recovery in the euro area. Over the weekend, ECB President Mario Draghi that further gains in the euro would trigger additional monetary easing to keep inflation from falling.
 
The Australian dollar slightly weakened today against the U.S. dollar in quiet trading before the Easter long weekend. The Aussie traded at 93.59 U.S. cents remained near its recent five-month high of 94.63 U.S. cents ahead of domestic inflation data due next Wednesday.
 
Canada’s inflation rate rebounded in March as rising energy prices triggered the biggest gain in shelter costs in more than three years. The inflation rate returned to 1.5 percent after slowing to 1.1 percent in February, Statistics Canada said today in Ottawa. The core rate, which excludes eight volatile products, increased 1.3 percent after a 1.2 percent gain the prior month. Bank of Canada Governor Stephen Poloz said yesterday he will dismiss faster inflation this year as temporary while the underlying trend remains “subdued.” Slack in the economy that will damp inflationary pressure kept Poloz “neutral” about his next move in his trend-setting interest rate, which has been 1 percent since September 2010. The loonie strengthened 0.2 percent to 1.0995 per U.S. dollar at 10:10 a.m. in Toronto.
 
The Japanese yen bounced back from a one-week low against the U.S. dollar on Thursday, with investors taking their cues from recently volatile Japanese equities, though activity was thin as investors wound down trading ahead of the Easter holidays. The yen traded at 102.01 per U.S. dollar.
 
The Chinese yuan rose the most in more than three weeks after the government said it’ll lower reserve-requirement ratios at some rural banks. The People's Bank of China set the dollar/yuan central parity rate at 6.1575, lower than Wednesday's 6.1589.

 
This market update is prepared by Cathay Bank for informational purposes only and does not constitute any form of legal, tax or investment advice, nor should it be considered an assurance or guarantee of future exchange rate movements or trends. This information is provided without regard to the specific objectives, financial situation or needs of any recipient. Cathay Bank does not make any representations or warranties about the accuracy, completeness or adequacy of this market update.
 

 

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