The Greenback advances as Lloyds bank posts a huge loss and investors look for s

The greenback rose after Lloyds Banking Group Plc posted a first half loss and increased the size of bad debt provisions, boosting demand for the safety of the Japanese and U.S. currencies. The pound fell for the first time in six days against the yen after London-based Lloyds said its total impairments in the first half were “significantly” higher at 13.4 billion pounds ($22.7 billion). “Banks in Britain and in the euro-zone probably still have a lot of bad loans, so this is a big risk to long positions in the pound and the euro,” said Michiyoshi Kato, senior vice president of foreign-currency sales in Tokyo at Mizuho Corporate Bank Ltd. “It’s a situation where the pound and the euro are easy to sell and the yen and the dollar to buy.” A long position is a bet an asset will rise. The EUR/USD is currently trading at $1.4385 as of 8:38am, London Time.

The British Pound rose against the dollar on Tuesday, extending gains in the aftermath of strong UK data and optimism about UK bank earnings which helped to sustain demand for currencies seen to be higher risk. The UK currency climbed as high as $1.7005 in Asian trade its strongest since last October as higher shares in the region stoked demand for risk to the detriment of the dollar. A 1.0 percent slide in UK shares pulled the pound away from the $1.70 Level though. "We've seen a halt in equity gains, and so we're also seeing a halt in higher-risk forex," said Naeem Wahid, currency strategist at Bank of Scotland Treasury Services in London."There's some consolidation going on in sterling," he said, while adding that risks to the pound remained to the upside. The GBP/USD is currently trading at $1.6930 as of 8:58am, London Time.

HSBC Holdings Plc Chairman Stephen Green said the bank’s U.S. business is “going better than expected,” after loan charges at Europe’s largest lender increased more slowly than anticipated in the first half. The bank yesterday reported a pretax loss of $3.7 billion from North American Operations, compared with a loss of $2.89 billion a year earlier. HSBC set aside $13.9 billion to cover bad loans, less than the $15.3 billion median estimate among analysts surveyed by Bloomberg. “I can’t tell you what’s happening with impairments, but it’s going better than we expected and analysts expected,” Green said in a Bloomberg Television interview today. “And the rundown is going well.”

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