Major Currency Pairs Analysis: June 13, 2013

European stocks declined overnight, as wrangling between Greek politicians following the shutdown of the state broadcaster. Society General SA, Barclays Plc and Deutsche Bank AG led a selloff in banks, each falling over 2 percent. Severn Trent Plc (SVT) sank the most since October 2006 after a consortium of investors dropped their bid for the water utility. Kabel Deutschland Holding AG jumped 8.2 percent after Vodafone Group Plc confirmed it approached the company about a takeover. Greece’s benchmark ASE Index dropped 3.2 percent, extending its slide so far this week to 12 percent, as Prime Minister Antonis Samaras shut the nation’s public broadcaster overnight. The Pasok and Democratic Left parties today submitted a draft law to overturn the ruling.
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GBP/USD
The pound strengthened to a three-week high against the euro after a government report showed U.K. jobless claims fell more last month than economists forecast. The sterling advanced for a second day versus the 17-nation currency, as a wider measure of unemployment declined in April, adding to evidence an economic recovery is under way. U.K. 30-year bonds rose for a second day after yields climbed to the highest since February yesterday. Gilts have led losses among the bonds of Group-of-Seven nations this year, as government securities have tumbled amid speculation the Federal Reserve will taper its asset purchases.
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USD/JPY
The yen fell earlier on speculation the biggest gain in three years yesterday was too rapid, amid forecasts for further stimulus from the Bank of Japan. The greenback was little changed at 96.02 yen after gaining as much as 1 percent. The BoJ refrained from adding stimulus, or expanding its toolkit for tackling volatility in bonds after a policy meeting yesterday. Governor Haruhiko Kuroda said the central bank would discuss longer fund operations needed to calm markets. The yen slumped 7.9 percent this year, the worst performer among 10 developed-market currencies.
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USD/CAD
Canada said it will require mining and energy firms to report payments they make to governments. The new system “will seek to enhance transparency and accountability around material payments by extractive companies to all levels of governments domestically and internationally, including taxes, license fees and other receipts,” the office of Prime Minister Stephen Harper said today in a statement issued in London. The move is “in keeping with” efforts by the U.K. to promote transparency at the summit of Group of Eight leaders in Northern Ireland next week, the government said in the statement. Canada will consult with industry, the country’s provinces and other stakeholders “over the coming months” before implementing the system.
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