The USD/JPY currency pair has broken above the 155 level, a fresh high since 1990. The move was aided by comments from an LDP official indicating no immediate plans for intervention. The Canadian dollar also gained ground against the US dollar following a weaker retail sales report, reaching 1.3725. However, a late-day decline in the US dollar helped the pound and euro recover.
The Canadian dollar (CAD) has been on a four-day winning streak, but this recovery follows a steep decline in the previous four days. Despite ongoing concerns about interest rate cuts, the currency has benefited from the following factors: A government hike in capital gains taxes, which eased fears of more severe corporate or windfall taxes, and a recovery in the housing market. While the rebound is notable, it may not be significant in the long term as the Bank of Canada (BOC) is expected to cut rates more than the Federal Reserve (Fed). The outlook for CAD may remain favorable due to potential global soft landing and upside risks in China. However, analysts advise caution and suggest buying USD/CAD near 1.36.
