10 October 2008

The dollar kept the euro in respect before the G7 but succumbs to yen

The dollar was operating a marked increase facing most currencies Friday except the yen, a few hours of a crucial meeting of major argentiers Group of Seven (G7), and against a backdrop of global collapse scholarships.

Towards 13H00 GMT (15H00 Paris), the euro bought 1.3494 dollars against 1.3590 dollars Thursday to 21H00 GMT.

The euro also declined to address the Japanese currency to 133.89 yen against 135.23 the previous day, after touching a new lowest since July 2005 at 132.83 yen.

After Wednesday below 100 yen for the first time in seven months, the dollar was down always, Friday at 98.93 yen against 99.50 yen yesterday.

It hit a new low since last March at 97.92 yen to the dollar Friday.

"Despite the bankruptcy of the insurer Yamato Life, the system should not deal with systemic crisis and the yen continue to reap the gains of a risk aversion extremely strong," commented analyst with Barclays Capital.

Against other currencies, the greenback was supported in the European exchange by the publication of the trade deficit the United States, down by 3.5% in August compared to July.

The U.S. currency has especially benefited from its role as refuge value while many stock exchanges had closed in Europe and is growing speculation on the outcome of the G7.

According to The New York Times, Washington is now planning to take shares in the capital of "many American banks to try to restore confidence in the financial system."

Some analysts also relaying of rumor about a possible guarantee of interbank lending by central banks.

The appetite for risk faded exchange market since the financial crisis, trade is limited and driven by panic or feelings more than by fundamentals.

In periods of high uncertainty, traders flee to shelters values, as the dollar or U.S. Treasury bonds, end their movements speculation as "carry trade", making up the yen, and carry out remittances (deleveraging) that immerse the currencies of emerging economies and high yield currencies like the euro whose interest rate is 3.75% or pound sterling (4.5%).

The pound sterling fell to a low Friday during Asian trade facing the greenback at 1.6792 dollar, a level reached since November 2003.

The Polish zloty dropped sharply, falling to 2.6956 zlotys to the dollar, a low since September 2007, while the National Bank of Romania intervened to support the leu.

The British currency back facing the European currency, to 79.34 pence per euro, fell face the greenback at 1.7055 dollar.

The Swiss currency back against the euro at 1.5137 Swiss francs to one euro, as against the dollar to 1.1186 Swiss francs to the dollar.

The ounce of gold was 886.75 dollars against morning fixing of 883.50 dollars the previous evening.

The Chinese yuan closed at 6.8359 yuan to one U.S. dollar against 6.8202 yuan yesterday.

by erectusplus at 17:22:00 |

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