By CountingPips.com
The U.S. dollar and Japanese yen traded higher today in forex trading against the other major currencies while the U.S. stock markets fell slightly. The risk aversion theme played out today in the markets on reports that China has instructed some banks to raise their reserve capital requirements and to restrict their lending in an effort to cool off the Chinese economy. This revelation has prompted speculation that these actions could work to dampen the global economic recovery 
including the economies of high-yielding currency countries like Australia and New Zealand.
The news sent the dollar and yen trading higher versus the euro, British pound sterling, Australian dollar, New Zealand dollar, Canadian dollar and Swiss franc in the forex markets today. The U.S. dollar fell against the yen in head-to-head trading as the USD/JPY currency pair dropped under the 90.00 level to trade at its lowest level since December 18th.
The American currency, meanwhile, touched a monthly high against the Canadian dollar as the USD/CAD pair reached the 1.0692 level for the first time since December 21st while the dollar also marked its highest point versus the Australian dollar since January 3rd.
The U.S. stock markets ended the day with a negative session as the Dow fell by roughly 2.57 points while the Nasdaq decreased by 7.07 points and the S&P 500 declined by 4.61 points. Oil edged lower by $0.54 to trade at $74.72 and gold declined by $2.20 to the $1,093.00 per ounce level.
Wednesday is a major news day in the markets with the Federal Reserve’s interest rate announcement taking place at 19:15 GMT and the Reserve Bank of New Zealand’s interest rate announcement taking place at 20:00 GMT. Both central banks are expected to maintain their current rate levels.
