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In New Zealand, economic figures are released early – Trade Balance is expected to turn negative – a deficit of 28 million is expected to follow a few months of surplus.
Later in New Zealand, the NBNZ Business Confidence is an important official release that always rocks the kiwi. It fell to 27.9 points last month, hurting the currency. To close the day, Building Consents, are released, and will show how the housing sector is doing.
For more on the New Zealand dollar, read the NZD/USD forecast.
The Malaysian central bank’s sharia advisers have outlawed the payment of a fee to support a pledge made in Islamic forward foreign currency transactions, saying such charges contravene the religion.
Islamic banks tend to levy a payment when a promise or “waad” is made to enter into a forward foreign currency hedging contract to reflect the parties’ commitment to the transaction. Bank Negara’s sharia advisory council, whose rulings are binding on Islamic banks in Malaysia, said such charges would render the promise a bilateral waad, which is not allowed by the sharia.
A bilateral waad is deemed a contract and some experts said in this context it could lead to an agreement without the present delivery of the price and subject matter of the transaction, giving rise to uncertainty which is prohibited by Islamic law.
Japanese Prime Minister Naoto Kan said on Wednesday that he did not comment on currency intervention in a meeting with business lobbies and will not comment on it now. He also told reporters that he plans to consider economic steps quickly. Japan is not ruling out market intervention to curb the yen’s rise, government sources said on Wednesday, sending the strongest signal yet that the currency’s march towards all-time highs may spur Tokyo into action.
The dollar hit a fresh 15-year low against the yen Tuesday, falling below Y84 as investors probed the determination of Japanese authorities to hinder their currency’s advance. The euro also hit a nine-year low against the yen, as the Japanese currency continues to soar. Losses in equity markets and nerves about the slow pace of global growth sent investors running to the traditional safe harbor.
The yen’s gains further stoked speculation that Japanese authorities will take action to combat yen appreciation, which hurts the country’s export-driven economy. The euro also fell to its lowest level against the dollar in roughly five weeks, and currencies tied to commodities, such as the Australian, New Zealand and Canadian dollars were all down sharply.
