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The Yen was further down today since pairs were focused on the JAL’s expected bankruptcy announcement (0800GMT).

The USD continued its gain, as Forex investors were rallying their speculation that JAL will file for bankruptcy, leading to additional data proving that the Japanese economy is continuing to fall.

The Bank of Japan’s recent announcement that they intend to fight deflation resulted in further loose monetary policy. With the US waking from its recent holiday, investors might be slow in their trading activity today

CAD/JPY – 64 pips (87.96-88.58); AUD/JPY – 95 pips (83.27-84.22);
USD/JPY – 46 pips (90.61-91.05); GBP/JPY – 137 pips (147.51-148.88)

GBP. This morning (0930GMT), the UK Consumer Price Index Report for December was due, which is an important indicator for the emerging inflation trends and further monetary policy.

Inflation pressures have been rising as a result of the rising commodity prices and sterling weakness to name a few.

For example, Core Producer output prices rose in December by 0.7% – the biggest monthly gain since May 2008.

These emerging pressures, together with the possibility that some retailers could raise prices ahead of the VAT increase on 1 January, raise the probability that inflation rose further during last month.

GBP/USD – 128 pips (1.6249-1.6377); EUR/GBP – 52 pips (0.8780-0.8832)
GBP/CAD – 94 pips (1.6719-1.6813); GBP/JPY – 137 pips (147.51-148.88)

CAD. Today, the Bank of Canada Interest rate (1400 GMT) should show this old benchmark rate to remain at its record low of 0.25% and repeat the pledge to leave it unchanged through June, as an appreciating currency threatens to hamper the economic recovery.

Pedro Antunes, the director of economic forecasting at the Conference Board of Canada in Ottawa stated that: “Any suggestion they will raise rates before the U.S. would probably drive up the currency”, adding today that “They will be hesitant to make any changes” .

USD/CAD – 66 pips (1.0246-1.0312); EUR/CAD – 63 pips (1.4737-1.4800);
AUD/CAD – 64 pips (0.9452-0.9516)