The currency index represents the evolution of a currency relative to the entire forex. The index is the average of one currency compared to others. The chart representation makes it easy to view trends by currency.

Effective Review Period: 15 March 2011 - 25 March 2011
Currencies: USD compared to EUR, GBP & JPY

Currency Heat Map Review
The objective of the Currency Heat Map is to provide a graphical presentation on the relative strengths of major currencies relative to others.

Friday, the yen weakened against other major currencies in Asian trading after finance ministers and central bank governors from the Group of Seven agreed to intervene jointly in the foreign exchange markets for the first time in more than a decade to stabilize the yen.

The G7 nations are the United States, Japan, Germany, Britain, France, Italy and Canada.

Today's joint agreement by the G7 officials came in response to the yen's surge to record level against the dollar this week.

"In response to recent movements in the exchange rate of the yen associated with the tragic events in Japan, and at the request of the Japanese authorities, the authorities of the United States, the United Kingdom, Canada, and the European Central Bank will join with Japan, on March 18, in concerted intervention in exchange markets," the G7 statement said.

"We express our solidarity with the Japanese people in these difficult times, our readiness to provided needed cooperation and our confidence in the resilience of the Japanese economy and financial sector," the G7 statement said.

The yen has climbed steadily since last week's earthquake and tsunami as global investors closed long positions in higher-yielding and riskier assets, funded by cheap borrowing in the Japanese currency.

Expectations that Japanese companies will repatriate their overseas assets to help cover disaster-related costs also contributed to the yen's strength.

In an effort to calm markets and to reassure investors, the Bank of Japan poured cash into the financial system this week to stabilize money markets. The central bank doubled its asset-purchase fund to 10 trillion yen on March 14, pledging to step up purchases of securities including government debt, exchange-traded funds and real-estate investment trusts.

Japanese Finance Minister Yoshihiko Noda said this morning that the dollar's plunge to an all-time low around the 76 level against the yen was a factor taken into account in Japan's decision to seek cooperation in intervention in the currency markets from its Group of Seven counterparts.

Noda also said Japan's Ministry of Finance started intervention at 9 am Tokyo time and each other central banks would intervene in their own timezones.

Early in Asia yesterday, the yen surged up to a record high against the U.S. dollar, 2-year high against the pound and the Canadian dollar and new multi-month highs against the euro, franc, Aussie and the NZ dollar. But the yen came off from highs in late Asian trade and almost moved sideways in the European and U.S. sessions.

The yen's plunge today took it to a 2-week low against the euro and multi-day lows against the rest of majors. Thus far, the yen lost 7.3 percent against the greenback, 8.6 percent against the euro, 6.6 percent against the franc, 8 percent against the pound and the Canadian dollar and 9 percent against the Australian and New Zealand dollars.

Today's coordinated intervention in international currency markets marked the first by the G-7 countries since 2000, when they intervened in an effort to strengthen the euro.

Japan had called on the group to issue a statement in October 2008, when the global financial crisis drove the yen near a 13-year high against the dollar. They responded by expressing concern about "excessive" volatility, stopping short of indicating any intervention.

However, the Japanese government stepped into currency markets on September 15, 2010 after the yen rose to a 15-year high against the dollar.

The yen declined against the U.S. dollar in Asian deals. The yen is currently trading at a 3-day low of 81.86 against the dollar. If the yen weakens further, it may likely target the 83.0 level. The dollar-yen pair closed yesterday's trading at 78.92.

During Asian deals, the yen dropped to a 2-week low of 115.30 against the euro. The next downside target level for the yen is seen at 116.0. At yesterday's close, the euro-yen pair was quoted at 110.66.

The yen fell to near a 1-year low of 90.34 against the Swiss franc in the Asian session. On the downside, 91.1 is seen as the next target level for the Japanese currency. The franc-yen pair was worth 87.87 at yesterday's close.

The yen also slipped to a 3-day low of 132.54 against the pound and 83.46 against the Canadian dollar in Asian trading. If the yen slides further, it may target 135.3 against the pound and 85.2 against the loonie. The pound-yen and the loonie-yen pairs were worth 127.35 and 80.11, respectively at yesterday's close.

The yen edged down to a 3-day low of 81.43 against the Australian dollar in the Asian session. On the downside, 82.0 is seen as the next target level for the Japanese currency. At yesterday's close, the aussie-yen pair was quoted at 77.40.

Against the New Zealand dollar, the yen declined to a 3-day low of 59.78. This may be compared to yesterday's close of 56.65. The next downside target level for the yen is seen at 60.5.

Sentiment across Asian markets also received a boost today amid reports that a power cable has now reached reactor no. 2 of the troubled Fukushima Daiichi nuclear plant in Japan.

Japan's Nikkei 225 index rose 3 percent, Hong Kong's Hang Seng climbed 0.7 percent, China's Shangai composite index soared 0.6 percent, New Zealand's NZX 50 index gained 0.3 percent, South Korea's Kospi advanced 1 percent, Taiwan's main index edged up 1.3 percent, Australia's S&P 200 index advanced 1.3 percent and the All Ordinaries index was 1.4 percent higher.

In the upcoming European session, German PPI, U.K. public finances data and Swiss import and export prices - all for February, Eurozone current account and trade balance for January are slated for release.

At 7 am ET, Canada's CPI for February is expected.

FUKUSHIMA: Japan scrambled to avert a meltdown at a stricken nuclear plant yesterday after a hydrogen explosion at one reactor and exposure of fuel rods at another, just days after a devastating earthquake and tsunami that killed at least 10,000 people.

Roads and rail, power and ports have been crippled across much of Japan’s northeast and estimates of the cost of the multiple disasters have leapt to as much as US$170 billion (RM517 billion).

Analysts said the economy could even tip back into recession. Japanese stocks closed down more than 7.5 per cent, wiping US$287 billion off market capitalisation in the biggest fall since the height of the global financial crisis in 2008.

Rescue workers combed the tsunami battered region north of Tokyo for survivors and struggled to care for millions of people without power and water in what Prime Minister Naoto Kan has dubbed his country’s worst crisis since World War 2.

Officials say at least 10,000 people were likely killed in the 8.9-magnitude earthquake and tsunami that followed it. Kyodo news agency reported that 2,000 bodies had been found yesterday in two coastal towns alone.

“It’s a scene from hell, absolutely nightmarish,” said Patrick Fuller of the International Red Cross Federation from the town of Otsuchi.

“The situation here is just beyond belief, almost everything has been flattened. The government is saying that 9,500 people, more than half of the population, could have died and I do fear the worst.” The big fear at the Fukushima nuclear complex, 240km north of Tokyo, is of a major radiation leak.

Jiji news agency said fuel rods at the No. 2 reactor had been entirely exposed and a fuel rod meltdown could not be ruled out.

The plant operator confirmed there was little water left in the reactor.

The explosion happened at the No. 3 reactor, two days after a blast at the No. 1 reactor.

A meltdown raises the risk of damage to the reactor vessel and a possible radioactive leak. Levels of cooling sea water around the reactor core had been reported as falling earlier in the day. Jiji said the pump had run out of fuel. Crucially, officials said the thick walls around the radioactive cores of the damaged reactors appeared to be intact after the earlier hydrogen blast.

The core container of the No. 3 reactor was intact after the explosion, the government said, but it warned those still in the 20km evacuation zone to stay indoors.

The plant operator, Tokyo Electric Power Co (Tepco) , said 11 people had been injured in the blast.

Kyodo said 80,000 people had been evacuated from the zone, joining more than 450,000 other evacuees from quake and tsunami-hit areas in the northeast.

“Everything I’ve seen says that the containment structure is operating as it’s designed to operate. It’s keeping the radiation in and it’s holding everything in, which is the good news,” said Murray Jennex, of San Diego State University.

“This is nothing like a Chernobyl ... At Chernobyl (in Ukraine in 1986) you had no containment structure — when it blew, it blew everything straight out into the atmosphere.” Nuclear experts said it was probably the first time in the industry’s 57-year history that sea water has been used in this way, a sign of how close Japan may be to a major accident.

“Injection of sea water into a core is an extreme measure,” Mark Hibbs of the Carnegie Endowment for International Peace. “This is not according to the book.” The nuclear accident, the worst since Chernobyl, sparked criticism that authorities were ill-prepared and the threat that could pose to the countr y’s nuclear power industry.

A Japanese official said before the blast that 22 people were confirmed to have suffered radiation contamination and up to 190 may have been exposed. Workers in protective clothing used hand-held scanners to check people arriving at evacuation c e n t r e s.

United States warships and planes helping with relief efforts moved away from the coast temporarily because of low-level radiation. The US Seventh Fleet described the move as precautionar y.

Almost two million households were without power in the north, the government said. There were about 1.4 million without running water.

Tens of thousands are missing. The town of Otsuchi in Iwate prefecture was obliterated.

“After my long career in the Red Cross where I have seen many disasters and catastrophes, this is the worst I have ever seen. Otsuchi reminds me of Osaka and Tokyo after World War 2 when everything was destroyed and flattened,” Japan Red Cross President Tadateru Konoe said during a visit to the coastal town.

Whole villages and towns have been wiped off the map by Friday’s wall of water, triggering an international humanitarian effort of epic propor tions.

“When the tsunami struck, I was trying to evacuate people. I looked back, and then it was like the computer graphics scene I’ve seen from the movie Armageddon. I thought it was a dream.

“It was really like the end of the wo r l d , ” said Tsutomu Sato, 46, in Rikuzantakata, a town on the northeast coast. Estimates of the economic impact are only now starting to emerge.

Hiromichi Shirakawa, chief economist for Japan at Credit Suisse, said in a note to clients that the economic loss will likely be around 14-15 trillion yen (RM520 billion to RM556 billion) just to the region hit by the quake and tsunami.

Even that would put it above the commonly accepted cost of the 1995 Kobe quake, which killed 6,000 people.

The earthquake has forced many firms to suspend production and shares in some of Japan’s biggest companies tumbled yesterday, with Toyota Corp dropping almost eight per cent.

The earthquake was the fifth most powerful to hit the world in the past century. It surpassed the Great Kanto quake of Sept 1, 1923, which had a magnitude of 7.9 and killed more than 140,000 people in the Tokyo area. — Reuters