It has been a long time since a G7 statement received this much interest by foreign exchange traders. During the European trading session, a brief statement released by the G7 that contained no major changes to the exchange rate language provided support for USD/JPY and led many investors to believe that G20 would do the same. Unfortunately, USD/JPY came crashing down at the start of the NY session when a G7 official said their statement was misinterpreted because they are concerned about excessive moves in the Japanese Yen. The official also indicated that Japan will be in focus at the G20 meeting in Moscow. For the G7 to come out and release an official statement in Washington aimed directly at resetting market expectations is a strong sign that they do not endorse a one way move in the Yen. Considering that the statement on currencies is still relatively boilerplate, the clarification means that the G7 clearly does not want to step on the G20's toes and draw away from the main meeting. There is still a risk that Japan will be criticized on Thursday and also the risk that Japanese officials will try to talk up the Yen prior to the meeting.

Meanwhile Bank of Canada Governor Carney also spoke this morning and his comments helped to lift the Canadian dollar. Carney said that while "higher rates in Canada are less imminent, they are still likely to be needed over time because inflation risks are roughly balanced, Europe is in a better place than in October, the quality of U.S. growth improved and there is still a positive outlook for the labor market." He also said that the discount in the price of Western Canada Select oil and Crude has less to do with weak U.S. demand and more to do with the lack of pipelines and refining in Canada. Overall his relatively optimistic comments on the outlook for the domestic and global economy reminds investors that the Bank of Canada still leans more towards tighter and not looser monetary policy.

ECB President Draghi is also scheduled to speak this morning and his comments could affect the euro. The single currency has found support thanks to comments from ECB member Constancio who suggested that the central bank's staff forecasts will not be changed significantly, lowering the risk of any significant downgrades.

We'll let you decide whether the G7 statement on currencies has been "misinterpreted":

"We, the G7 Ministers and Governors, reaffirm our longstanding commitment to market determined exchange rates and to consult closely in regard to actions in foreign exchange markets. We reaffirm that our fiscal and monetary policies have been and will remain oriented towards meeting our respective domestic objectives using domestic instruments, and that we will not target exchange rates. We are agreed that excessive volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability. We will continue to consult closely on exchange markets and cooperate as appropriate."