|    FM Home   |    FM News   |    FM Forum   |    FM Blog   |   
Sunday 01st of June 2008
November 13, 2006

Yen weakens on interest rate concerns


by Elaine Frei

The Japanese yen weakened on Monday on fears that an expected interest rate hike could reverse that nation’s economic recovery. Analysts expect the rate to go up before the new fiscal year begins in April 2007, but both the policy chief of the ruling Liberal Democratic party and a former financial services minister have said that raising rates too quickly could harm Japan’s economy.

By mid-afternoon in New York, the yen had lost 0.2 percent in relation to the euro to ¥151.34 and it was 0.5 percent lower versus the US dollar, to ¥118.15.

Sterling was lower as well, on weaker economic data than had been anticipated. Initially higher against the dollar, the UK currency dropped 0.5 percent to the greenback to $1.9015, while the UK currency was down 0.2 percent to £0.6732 against the euro.

The US dollar was 0.2 percent higher in relation to the euro to $1.2834 even though talk continued over last week’s comments from China that it is planning to diversify its foreign exchange reserves. Monday the talk continued as China’s State Information Centre, a think tank supported by the Chinese government, recommended that China should extend diversification by building its strategic reserves of bulk commodities, metals, and oil.

The Swiss franc added 0.2 percent versus the euro to SFr1.5935 on comments from the chairman of the Swiss National Bank that interest rate increases could help strengthen the currency there.

Lower metals prices hurt the Australian dollar, the Canadian dollar, and the South African rand as all fell in relation to the US dollar. The Canadian dollar dropped 0.5 percent to C$1.1374 against the greenback, while the Aussie fell 0.6 percent to $0.7625 to the US dollar, and the rand was 0.8 percent lower to R7.2535 to the dollar.


Discuss this in the Finance Markets forums


Email This Post Email This Post Print This Post Print This Post

Add to Bookmarks:

ADD TO DEL.ICIO.US     ADD TO DIGG     ADD TO FURL

ADD TO STUMBLEUPON     ADD TO YAHOO MYWEB     ADD TO GOOGLE     ADD TO SPURL

Previous: « New York markets higher at noon
Next: Most metals prices fall »

Visited 196 times, 1 so far today