Safe haven demand soared during Wednesday’s trade after another rout in oil prices sent investors fleeing to safety. Both the safe haven Japanese Yen and the Swiss Franc were the largest recipients of market jitters. The Euro, viewed as a carry trade currency, also got a boost from FX traders. At the same time, the US Dollar hit a 1-year trough against the Yen as expectations wane for another rate hike from the Federal Reserve Bank. Yesterday, the US Dollar had bounced on generally upbeat sentiment after the release of some tentative economic recovery signs from China.

As reported at 10:37 am (GMT) in London, the USD/JPY pair was trading at 116.6040 Yen, falling 0.88%; the pair has ranged from 115.9905 Yen to 117.6780 Yen at the high. The USD/CHF was trading 0.11% lower at 1.0023 Swiss Francs. Meanwhile the EUR/USD was trading higher at $1.0926, a gain of 0.14%. The US Dollar Index was trading at 98.874 .DXY, down 0.12%.

BOC Decision Could Impact Loonie

Later today, the Bank of Canada will make its decision on interest rates. Given that Canada’s economy is extremely reliant on production and export of crude oil, the continual decline in oil prices is likely to weigh heavily on the decision making process. Current expectations call for the BOC to maintain current policy but that Stehen Poloz, the Governor of the BOC, could hint at future easing. A rate cut would weigh on the Canadian Dollar; currently, the USD/CAD pair is trading at C$1.4634, a gain of 0.39%.