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Daily Analysis

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Yen soars against Euro and Sterling

Mon, Sep 1 2008, 11:15 GMT
by Benny Menashe

Finotec Group Inc.

The Japanese currency soared on Monday and hit a 4 month high against the euro and a 5 month high against the sterling. Struggling Global stock markets have reduced the appeal of holding higher yielding assets funded in Yen. It also rose against the USD as hurricane Gustav continued to threaten the Gulf of Mexico and oil and gas supplies. ``The yen is rising on a bout of risk reduction, falling stocks make players less inclined to sell the yen. There was also some interest in selling the dollar because the hurricane is bad for the U.S.'' said the director of currency trading in Tokyo at Barclays Capital Inc.
The yen rose to 158.42 per euro, the strongest since April 14, before trading at 157.73 at 7.56 am GMT in London. Japans currency was trading at 107.84 per dollar as of 8.56 am GMT, the strongest since Aug. 4. GBP/JPY was trading at 194.41 at 8.30 am GMT.
Meanwhile in London Cable fell to its lowest level since April 2006 after the Chancellor of the Exchequer said the UK economy might be in the worst state in 60 years. While the BOE is suspected to keeps rates on hold at 5%, speculation that the central bank will lower rates later in the year has hit sterling hard.“Certainly no one is rushing to buy Cable at the moment. There was a lot of weekend press about how bad the UK economy is at the moment, so that’s weighing on the market,” said the head of FX trading at Standard Chartered in Hong Kong.
The pound fell as much as 1.1 percent to $1.8006, the lowest level since April 2006, before trading at $1.8067 by 8:31 a.m. in London, from $1.8211 last week.

Today's Economic Events

Published on  Mon, Sep 1 2008, 11:22 GMT