Dollar up against yen on rate cut speculation
The dollar rose against the yen on speculation the Federal Reserve's interest-rate cuts and efforts to spur lending will help revive economic growth.
The US currency also advanced versus the Swiss franc and Canadian dollar, extending gains since the Fed's March 18 move to reduce its benchmark rate 0.75 percentage point to 2.25 percent. The dollar also rose after some analysts said the Group of Seven nations may take coordinated action in currency markets to counter the impact of a slowing US economy.
"The dollar will remain firm in the near term," said Kosuke Hanao, head of currency sales in Tokyo at HSBC Bank, a unit of Europe's biggest lender. "The markets valued the Fed's relief measures last week as good ones."
The dollar climbed 0.3 percent to 99.83 yen at 7:29 am in New York, from 99.58 on March 21. It traded at 1.5439 per euro, compared with 1.5431 at the end of last week, after touching $1.5341, the highest level since March 12.
Currency moves may be exaggerated because trading volumes are less than normal the day after Easter, said Kenichiro Fujita, manager of derivatives marketing in Tokyo at Aozora Bank Ltd, Japan's ninth-largest publicly traded lender by assets. Markets were closed yesterday in the United Kingdom., Australia and New Zealand.
The US Dollar Index traded on ICE Futures in New York, which tracks the value of the currency against six major counterparts including the euro and yen, rose 0.5 percent to 73.058. The dollar climbed 0.8 percent versus the Swiss franc to 1.0171, 0.4 percent against the Norwegian krone to 5.2813 and 0.6 percent against Canada's dollar to 1.0292.
The Fed has expanded collateral eligible for its auction of Treasuries to include bundled mortgage debt and securities linked to commercial-property loans.
Agencies
(China Daily 03/25/2008 page16)
