HiFX: Foreign Exchange Specialists

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October 27, 2008

Today the Reserve Bank of Australia (RBA) intervened in the currency markets for the first time since August 2007, in attempt to add liquidity and prop up the currency.  Although there has been speculation that the RBA intervened as recently as last week, today’s actions were the first time that the RBA confirmed their intervention.  In line with the intervention theme there is increased speculation that a coordinated central bank intervention on the Japanese Yen could be seen after the G7 issued a communiqué stating their concern over the excessive volatility of the Japanese Yen.  Of note the Japanese Yen continues to hover at 13 year highs against the US Dollar and 8 year highs against the Australian Dollar.