Month: August 2011

London Gold Market Report
from Ben Traynor
BullionVault
Wednesday 31 August, 07:45 EDT

U.S. DOLLAR gold prices wavered around $1830 an ounce Wednesday morning London time – 4.3% off last week’s all-time record high – as prices of major commodities fell and stocks rose following Tuesday’s publication of the latest US Federal Reserve minutes.

Silver prices meantime traded around $41.41 per ounce – the price at which they started the week.

The gold price at Wednesday morning’s London Fix was $1826 per ounce, with gold heading for its biggest monthly gain since November 2009.

“The overall outlook for the precious metals remains dominated…by uncertainty over economic growth, and by speculation over what action policymakers might take to address the issue,” says one London gold bullion dealer.

“We expect QE3 [a possible third round of quantitative easing] to become an increasingly dominant issue for the markets as we enter September.”

If QE3 does not happen, however, then “we probably could expect gold prices to slide from this level,” warns Tom Price, global commodity analyst at UBS, “[if] we see slow improvement out of the United States, China increasing its control over inflation and the European market not lurching lower.”

In the US – where consumer confidence has, according to official surveys, hit its lowest point in over two years – the US Federal Reserve published the minutes of its latest Federal Open Market Committee meeting on Tuesday.

“Some members expressed the view that additional accommodation was warranted,” said the minutes.

“They expected the unemployment rate to remain well above, and inflation to be at or below, levels consistent with the Committee’s mandate.”

The Fed has a dual mandate to ensure stable prices and maximum employment. Though it currently has no official target for either, the Fed has forecast long run inflation to be between 1.7% and 2%, widely regarded as an informal target. Consumer price inflation in July was 3.6% per year.

The FOMC voted at the meeting on August 9 to maintain its policy rate below 0.25%, announcing afterwards that it expects its rate to stay “exceptionally low” for at least two years.

“The odds are rising that we will see more action to aid the economy at the September meeting,” reckons James O’Sullivan, chief economist at MF Global in New York.

US stock markets rose following publication of the minutes, with the S&P 500 ending Tuesday up 0.2%.

Asian stock markets also rose in Wednesday’s trade, as did European stocks on Wednesday morning.

Since the start of July, however, the FTSE 100 has lost 10.6%. The S&P is down 8.2%, the NIKKEI 225 has lost 8.8%, while the German DAX has plunged 22.6%.

“Over the summer period reality has been dawning, with investors realizing that the recovery is not going to be straightforward,” says Richard Jeffrey, chief investment officer at Cazenove Capital Management.

By contrast, gold prices have gained nearly 23% over the same period.

“The belief that the risk asset classes are compromised and are not worth having is driving gold prices up,” explains Swiss precious metals refiner MKS.

Over in China meantime “gold is a one-way market” at the moment, according to one bullion trader in Hong Kong, where dealers report that premiums have risen as high as $1.50 an ounce – up from $1.20 last week.

“With low interest rates and the possibility of a third round of quantitative easing in place, people are buying gold after prices corrected…the precious metal remains an attractive safe haven.”

“Prices came down from the peak last week,” adds a dealer in Singapore.

“This is the main cause behind the buying.”

“Physical demand is likely to be strong in September, October and November,” predicts another dealer quoted by news agency Reuters.

Analysts and dealers also expect strong buying from world’s largest gold market India over the next three months, as the country begins its annual festival season.

Here in Europe, Germany’s cabinet on Wednesday approved increasing the size of the European Financial Stability Facility, the Eurozone’s bailout mechanism. Germany’s share of EFSF loan guarantees will rise from €123 billion to €211 billion.

“The German government has strengthened its determination to secure the stability of the Euro,” said finance minister Wolfgang Schaeuble.

“I’m not against helping Greece,” countered Wolfgang Bosbach, a fellow-member of Chancellor Merkel’s CDU party.

“I just doubt that ever-higher debts can actually help…this is a fundamental question for our children and grandchildren, whom we’re already saddling with mountains of debt –and then we’re adding huge risks on top of that.”

Ben Traynor
BullionVault

Gold value calculator | Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(c) BullionVault 2011

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

By Kris Sayce

“Participants noted that devoting additional time to discussion of the possible costs and benefits of various potential tools would be useful, and they agreed that the September meeting should be extended to two days in order to provide more time.” – Minutes of 9 August, Federal Open Markets Committee Meeting

It’s just a question of “when” not “if”.

Money-Printing 3 is on the way.

The mainstream likes to talk of monetary “hawks” and “doves” at the U.S. Federal Reserve.

The term “hawks” refers to those who are supposedly cautious about keeping interest rates low as they fear it will cause higher inflation.

The term “doves” refers to those who are supposedly not cautious about keeping interest rates low. They see higher inflation as a necessary payoff in the drive to boost the economy.

In reality there aren’t any hawks and doves at the Fed. They’re all just vultures in disguise.

They’re pro higher inflation and more money printing. It’s just some are more pro-inflation than others.

So whether it’s at the Fed’s September, November or December meeting (note: the Fed doesn’t meet monthly, it meets a total of nine times this year), it’s more likely than not that the Fed will unleash another round of money printing.

You only have to read the latest minutes and compare the language to previous minutes to see they’re gearing up for it.

Here’s a quote from the March meeting noting non-farm payrolls:

“The labor market continued to show signs of firming. Private nonfarm payroll employment rose noticeably in February after a small increase in January, with the swing in hiring likely magnified by widespread snowstorms, which may have held down the employment figure for January.”

In other words, the Fed liked what it saw. Which is hardly surprising seeing as it was half-way through its money-printing 2 ruse.

Here’s what the Fed said at the August meeting:

“Private nonfarm employment rose at a considerably slower pace in June and July than earlier in the year, and employment in state and local governments continued to trend lower. The unemployment rate edged up, on net, since the beginning of the year, and long-duration unemployment remained very high. Meanwhile, the labor force participation rate moved down further through July.”

Now look at the following chart. It shows monthly non-farm payroll numbers over the last two years:

What do you notice the most? That’s right, non-farm payroll numbers are volatile. It’s pretty hard to analyse the data and draw conclusions on a monthly basis.

Yet back in March when the Fed met, the members looked at the January and February numbers and liked what they saw. Things were heading in the right direction… they thought.

Roll forward a few months and two months of low numbers, suddenly the Fed needs to do something.

The other thing you’ll notice from reading the August minutes is there’s no mention of the drop in the July unemployment rate from 9.2% to 9.1%… and no mention of the fact that four days before the meeting the Labor Department announced total payrolls had beaten market expectations.

A cause for celebration? Not on your life. As far as the Fed is concerned, it’s got to do something. If they highlight the positives, it’s less reason for them to meddle.

So now the Fed has to focus on the negatives. We wouldn’t want the economy righting itself would we? Not when there’s meddling to be done…

But let’s get something straight. The actual underlying economy hasn’t changed. It was the same in June and July, as it was in March – stuffed.

The only difference is the Fed is now doing the old “glass half empty” routine… so it can keep printing money and keep propping up its pals at the banks.

And the markets can see the Fed money printing too. Traders are placing the same old bets. Gold has rebounded after the heavy sell-off last week. It’s now trading at USD$1,827 and AUD$1,713.

And as you’d expect, traders are selling the safety of the Swiss franc and buying the risky Aussie dollar.

As you know, the Swiss franc is one of our early warning signals for crashing markets. The climb back to CHF0.875 this morning has the alarm bells ringing again… albeit quietly at the moment.

It tells you traders are backing out of safety and plunging forward into risky bets.

The 500-point snapback in the Aussie market since the recent low proves this is happening. In fact, if you look at the charts, there’s almost a perfect correlation between the Aussie dollar/Swiss franc exchange rate (blue line), and the S&P/ASX 200 (red line):

Click here to enlarge

But remember: don’t start thinking this is a sure sign of a strong Aussie economy and share market. The reality is that the extreme volatility is the result of the actions of one man… Dr. Ben S. Bernanke.

Or as we prefer to call him: Public Enemy No. 1.

And one thing is for sure, expect the volatility to continue as we approach and pass the next Fed meeting on September 20-21.

Cheers.
Kris

PS. Slipstream Trader Murray Dawes is releasing another free market update on You Tube this afternoon. I highly suggest you watch it. The volatility index (VIX) is pushing 30. And this month alone, billions has been wiped off the market (and billions put back on again). This market action is causing havoc for most traders. But Murray has been picking the swings like a peach. In fact, he’s put his readers in a position to bank big gains. To see where Murray expects the market to head next, click here… It’s completely free.

MoneyMorning Original Article: How to Tell a Hawk from a Vulture

Aug. 31 (Bloomberg) — Will Duff Gordon, a senior research analyst at Data Explorers, talks about the gold market and short-selling activity. He speaks with Francine Lacqua on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.

The CHF was out in front of the EUR this morning as weak German unemployment data overshadowed positive retail sales numbers. At the same time market participants have begun to shift their expectations for ECB interest rate hikes.

German retail sales numbers for July were unchanged though better than market forecasts for a decline of -1.5%. However, the report was overshadowed by the disappointing German unemployment change. The euro zone unemployment rate also unexpectedly ticked up to 10% from 9.9%. Euro zone CPI was in-line with consensus forecasts of 2.5% y/y. The combination of a slowdown in economic activity in the euro zone (German Q2 GDP rose by 0.1% while French GDP was flat) and Monday’s comments by Trichet have market players adjusting their ECB interest rate expectations which has weighed on the EUR. According to Credit Suisse market expectations are for 15 bp of cuts within the next 12-months as opposed to 25 bp of rate hikes.

The passage of the EFSF by the German cabinet did little to support the EUR. A vote will be sent to parliament to approve the right of the EFSF to buy bonds in the secondary market as well as the primary market, but only on the contingency to recognize cost efficiencies. The EFSF must be approved by all nations in the EMU for the EFSF to have legitimacy and herein lies the difficulty to get all in agreement.

The EUR/CHF fell as low as 1.1630 after earlier in the week failing to make a push above the 1.20 level. Traders should recall it was at this level that the SNB was rumored to be contemplating a peg to the EUR to help counter CHF strength so a failure to close above this level is significant. Yesterday’s doji candlestick also adds to the bearish picture. Support is found at the August 17th high of 1.1550 near the 55-day moving average. Resistance is located at this week’s high near the 100-day moving average at 1.20. Traders should also be eyeing the 200-day moving average which has served as resistance in the past.

Read more forex trading news on our forex blog.

Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.

By ForexYard

The US economy will be publishing several reports today, most importantly is ADP’s publication of Non-Farm Employment Change for the private sector at 13:15 GMT. The employment data is a foreshadowing of Friday’s Non-Farm Payrolls (NFP) data. The ADP report has a tendency to rapidly change the direction of the USD in trading and given the direction of employment changes this past week there is a chance it will surprise to the upside, helping to push the USD lower as the day progresses.

Economic News

USD – US Dollar Mixed as Speculators Undecided

The US dollar (USD) was seen trading mildly bearish on Tuesday as traders viewed comments by the Fed as a sign of potentially impending hawkish moves on the policy front. The sudden jolt to risk appetite generated by such movement pushed down on the greenback, but seems to have lifted following fears of another bank interventions in Japan and a string of reports out of the euro zone today which could reverse much of the markets recently acquired short-term stability.

Data from the American housing market Monday also signaled a downtick in housing demand from the previous month, contradicting yesterday’s news that housing prices were decreasing at a slower pace. The news has done little to the forex market, however, though it could ripple through longer-term analyses on US capital markets.

As for today, the US economic releases will focus mostly on employment and manufacturing. Today’s leading publication of ADP’s Non-Farm Employment Change will likely lead the day’s volatility. Liquidity will likely be higher in today’s mid-day trading as several European events are being published in rapid succession alongside the release of a handful of American events. Look for wide swings in currency values today.

EUR – EUR Bullish as Risk Sentiment Shifts towards Higher Yields

The euro (EUR) has been seen trading with largely bullish results so far this week as traders assess risk appetite across the region. Against the US dollar (USD) the euro was seen trading mildly bullish in late trading as shifts away from the greenback, due to uncertainty about the US employment and housing sectors, caused a stir in the foreign exchange market.

The economic calendar this week has been mostly bearish for the region, however, with housing and manufacturing reports disappointing traders. The manufacturing data across the euro zone and Britain has also shown little change. Italian retail sales contracted this past month, as revealed in yesterday’s data releases, and British news turned almost exclusively bearish.

On tap today, traders will witness the release of regional retail sales reports and employment data, though few consider them to be highly impactful given the series of significant releases out of the US economy a bit later in the day. Focus will undoubtedly be on the US employment and manufacturing sector today as both will be publishing highly relevant reports later in the afternoon. Should news produce bearish results there is a chance that traders will move away from the EUR and back into safe-haven assets.

AUD – Housing Dip Pulls Down on Aussie Dollar

The Australian dollar (AUD) was trading mostly weaker versus its currency counterparts yesterday after data releases have begun to shift traders into higher yields with solid capital markets. The Aussie has been losing momentum these past few weeks as risk sentiment flutters in the global market. Overriding these concerns, moreover, is a sudden dip in the Australian housing market which saw building permits and new home sales decline.

This movement has gouged the AUD against all of its currency rivals, especially against safe-havens like the US dollar (USD) and Japanese yen (JPY). Being tied to commodity prices could help lift the AUD in the near future, however, as oil prices hold above $86 a barrel, but general risk aversion is likely to push the currency lower as traders flee risk. On tap today, forex traders will see the release of Australia’s private sector credit figure measuring consumer demand of private loans. If negative news arrives, traders may see a heavier move towards risk aversion in early trading today.

Crude Oil – Crude Prices Steady amid Risk Aversion

Crude Oil prices held steady Tuesday as sentiment appeared to favor a downturn in global stocks ahead of a speculated double-dip recession. Data releases out of Europe and the US last week are still driving many investors back into safe-haven assets as many reports suggested a surprise downtick in growth among global industrial output and manufacturing demand.

An expected jump in dollar values due to this week’s risk averse environment has helped many investors ram up their short-taking positions on physical assets, but with the USD’s gains not materializing, sentiment appears to have the price of crude oil holding steady. Should Crude Oil sentiment continue to flatten this week, oil prices may reach a decision point which forces a wide swing by mid-week.

Technical News

EUR/USD

Last Friday’s candlestick posted an outside day up, a telling bullish signal. The EUR/USD has followed up this price action by breaking out above the falling resistance line off of the May high and triggering stops that were lurking above the 1.4520 area. Initial resistance for the pair comes in at 1.4540. A close above 1.4700 would signal an end to the sideways price action and open the door to the May high of 1.4940. To the downside the euro may find willing buyers at 1.4325 where the 20-day moving average is located. Further support is found at 1.4260 off of the rising support line from the July low as well as the long term trend line at 1.3940.

GBP/USD

After failing to make a close above the 1.6550 resistance level sterling was sold only to find support at its 55-day moving average near 1.6210. Rising daily stochastics hint at an additional test of the range between 1.6550 and 1.6615. A break here may have scope to the April high of 1.6745. Should the 55-day average fail to contain the pair support is found at 1.6110 where the 200-day moving average is floating. 1.6000 may also prove to be supportive.

USD/JPY

The doji candlestick reversal has bought the yen some temporary respite from the selling pressure at the 76 yen level as the pair failed to test the all-time low last week. However, falling stochastics appear on both the weekly and monthly charts and hint at additional declines in the USD/JPY. A lack of support on the charts makes it difficult to find a target to the downside. A move higher could see resistance at last week’s high of 77.70 followed by 78.50 and the post intervention high of 80.20.

USD/CHF

The reversal of the USD/CHF continues and the pair is beginning to show additional bullish signs. Traders should eye the close of the monthly candlestick. As it stands now the candle is set to close on hammer pattern, a potential reversal pattern that hints at additional gains. The pair is testing the falling trend line from the February high at 0.8090 and if broken could turn into support as often occurs with previously broken trend lines. Additional resistance is found at 0.8270 followed by the 100-day moving average at 0.8340.

The Wild Card

Gold

Spot gold prices have bounced from their lows near $1,700 after falling from a high of $1,900. The outside day down candlestick on August 23rd is an ominous signal, though the bearish sentiment could be reversed should the price move above the high of $1,911. Forex traders should note that after the $1,700 mark and the next support is located near $1,577 on the weekly chart.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

By China Research and Intelligence

www.shcri.com – Internet of things, also called sensor network, uses information sensing equipments such as radio frequency identification (RFID), sensor, global positioning system (GPS) and laser scanner to connect things with the Internet based on the given agreement to carry out information interchange and communications, realizing intelligent identification, positioning, tracking, monitoring and management. Internet of things involves numerous technologies such as radio frequency (RF), integrated circuit, communications, computer, software, system integration and Internet. As to the universality, only through the collaborative development of the above six technologies, the elimination of barriers among various industries and large scale and multi-industry application can realize the broad sense Internet of things. RFID is the most important and essential technology for Internet of things.

The explosive growth of Internet of things relies on the large scale application of super high band. As Internet of things is mainly for tracking, monitoring and management of things, the frequency band suitable for the large scale application of Internet of things is the ultra-high frequency (UHF). However, UHF is restricted by frequency resources in most countries, leading to various application frequencies for UHF in different countries. Moreover, the identification code of the label of Internet of things is also very important because things have to match with the only ID code to acquire their corresponding information from Internet. The coding rule and analytic method should be in accordance with the analytic method of Internet of things to acquire the information of things through accessing to the label.

RFID is the most important technology foundation for Internet of things. However, it develops extremely slowly in recent 1-2 years. The global RFID market scale was about USD 6 billion in 2008. The growth rate in 2008 was reduced significantly compared with the high growth rates in the past few years.

In China, RFID is mainly applied in certificate anti-counterfeiting, electronic payment, access and exit control, things tracking and management, production and manufacturing, warehouse and logistics, etc. The certificate anti-counterfeiting market covers the second generation ID card market, the student electronic ticket purchase certificate market and the electronic admission ticket, etc; the electronic payment market refers to fields related to consumption such as transportation card, campus card and measuring instrument (water, electricity and gas); the access and exit control system is applied in entrance guards of residence, enterprise and public institution, school dormitory and library as well as parking lots; other applications of RFID include tracking and management, security tracking and production management of things, which is concentrated in the high frequency of 13.56MHz. High-frequency technologies are widely accepted because of their maturity, globally united standard and actual demands.

The high-speed development of Chinese RFID market in past few years benefits from two factors: the original market is of small scale, so the relevant project construction in a region can arouse the rapid reaction of the market; it is stimulated by governmental projects prominently, which is also the most obvious characteristic of Chinese RFID market. If ID card is included in the RFID market, Chinese ID card project started since 2005 can be regarded as the world largest RFID application project. Thanks to the implementation of the second generation ID card project, Chinese RFID market still saw a high-speed growth in 2007 after the explosive growth in 2005 and 2006. Besides, Chinese transportation informationization construction has also provided opportunities for RFID in the transportation field. RFID technology has been applied in electronic admission tickets of Beijing Olympic Games, National Games, Shanghai World Expo, etc. However, due to the gradual saturation of the broad ID card market and the lack of large projects to drive the overall market growth, the growth rate of Chinese RFID market was reduced for the first time in 2008.

Based on the network structure, Internet of things is a distributed system to connect numerous RFID application systems through Internet and identify things in the wide area network. Chinese Internet of things still stays in the concept introduction stage while the market development is limited in its branches such as RFID, sensor and MEMS, etc. There is a long way to go to realize the collaborative cooperation of these technologies to form a gigantic Internet of things. Chinese Internet of things industry will only enter the high-speed development stage after 3-5 years.

Through this report, readers can acquire more information:
– Relevant concepts of Internet of things
– Current status of Internet of things market
– Application of Internet of things
– Factors affecting the development of Internet of things in China
– Relevant enterprises of Chinese Internet of things industry and their operation
– Prediction on the development of Chinese Internet of things industry

Following persons are recommended to buy this report:
– Relevant enterprises of the Internet of things industry
– Logistics enterprises
– Smart card and card reader manufacturers
– Investors concerning Chinese Internet of things industry
– Research institutes concerning Chinese Internet of things industry
– Others concerning Chinese Internet of things industry

To get more details, please visit: http://www.shcri.com/reportdetail.asp?id=414

Contacts:
Eileen Gu
China Research and Intelligence
Website: http://www.shcri.com
Email: [email protected]
Tel: 86-21-6852-1029 ext.601

About the Author

RFID is the most important technology foundation for Internet of things. However, it develops extremely slowly in recent 1-2 years. The global RFID market scale was about USD 6 billion in 2008.

By Johnny Smiths

Forex trading is the biggest global financial market in the world. Because of the nature of forex trading it is considered gambling in some countries and made illegal, fortunately India is not one of these countries and many people profit from this activity.

India has recently relaxed its laws and introduced limited currency pairs to the financial markets for trading. The problem is the Rupee is not a very volatile currency which makes it hard to profit from such slow movements. The Rupee is highly protected by the RBI and they do not like it being exchanged for other currencies, which is why forex trading in India is somewhat limited.

The forex market is the same the world over it is still traded 5 days a week 24 hours a day. With trillions of dollars changing hands every day, there is no reason why Indian residence cannot grab a slice of this extremely lucrative market place and become part of this global phenomenon.
Although Indian residences are limited to the number of currency pairs that they can trade in India it does not stop them from using a managed account in a different country. This gives the full benefits of being able to trade the complete forex market. A managed account is the method of someone else trading on your spread betting account.

The process of opening a managed account is not that of an illegal venture and is happening all the time. It is the simple process of opening a recommended spread betting account and allowing a forex account manager to control you’re trading.

Opening and trading a managed account does not need much interaction from you; it is just a matter of signing the account over to the forex account manager and letting them go to work. They will place profitable trades on your account for which you keep the majority of the profits.

By using a managed account you are going to be opening yourself up to a world of benefits. The professional trader using your account is of vast experience and only makes money if he makes you money. Forex trading can be tricky and as India is relatively new to the game it would be wise to seek professional input for your trading.
You do not have to sit in front of the computer all day watching the forex charts that can be the job of the account manager. All you need to do is withdraw the winning from your account each month. The money is safe in the trading account because the money can only be withdrawn to the card or bank that it was first deposited from.
India has no choice but to join the global market of forex trading and open up all the currencies for trading by its individual residence. It will happen eventually but until that day using managed accounts is the best way to get your teeth into this massive market place.

Why not sit back relax and let a professional go to work on your account making you some serious investments.

About the Author

If you are looking to take part in forex trading in India then a forex managed account is often the best way to ensure a profitable investment.

The Swiss franc declined 0.6 percent to 82.09 centimes to the U.S. dollar in mid-day trading in London today. The pullback is based largely on speculation the Swiss National Bank will continue its efforts to weaken the currency. Investors have been turning to the Swiss franc as a safe haven and it is this demand that has caused the franc to appreciate against most of the major currencies.

In an attempt to oversupply the currency and halt the franc’s appreciation, the SNB sold another 634.25 million francs into the markets to increase the currency’s supply. The 91-day securities were sold with an average yield of minus 0.75 percent and even with a negative return, some investors were willing to forfeit capital in exchange for the perceived safety of the Swiss currency. Still, it appears that the Central Bank’s efforts have had some degree of success in halting – or at least slowing – the franc’s recent appreciation.

Safe Haven Status Diminished

It is too early to say with certainty if the SNB’s latest actions will prove sufficient to tarnish the franc’s safe haven status, but the Bank has managed to reverse some of the gains. In the six weeks ending in the middle of August, the franc rose 17 percent on the U.S. dollar and this rapid appreciation forced the SNB to intervene. The franc has since given back much of its earlier gains and is now worth only 5 percent more against the dollar than it was in early July.

If the franc continues to weaken, it will add considerably to the pressures already facing Japan’s policymakers. Like the franc, the yen has been a preferred target for storing funds in the search for short-term relief from the recent mayhem in the markets.

Japan Faces Economic and Political Upheaval

Complicating matters in Japan is the fact that the nation has just installed its fifth Prime Minster in six years. Formerly Japan’s Finance Minister, Yoshihiko Noda was selected earlier today to replace former Prime Minister Naoto Kan who resigned following severe criticism over his handling of the earthquake and tsunami that struck the island nation last March.

Noda is considered a “hawk” who earlier this month oversaw the sale of 4.5 trillion yen as part of Japan’s efforts to stem the yen’s rise. He has already hinted that his government will continue its proactive approach to prevent further appreciation of the currency.

Scott Boyd is a regular contributor for the OANDA MarketPulse FX blog.