Bloomberg News

Yen Near Month High as Global Slowdown Signs Spur Refuge Demand

June 06, 2011

June 7 (Bloomberg) -- The yen traded within 0.2 percent of a one-month high against the dollar on speculation the global economic recovery is slowing, spurring demand for the Japanese currency as a refuge.

Switzerland’s franc was 0.3 percent from a record high versus the greenback before reports today and tomorrow that may show a U.S. index of economic optimism fell in June and German exports declined in April. The Dollar Index held onto yesterday’s gain on prospects that Asian equities will extend a global slide, prompting investors to reduce holdings of higher- yielding assets.

“Mounting worries about a global economic slowdown are weighing on risk appetite,” said Mike Jones, a currency strategist at Bank of New Zealand Ltd. in Wellington. “This may cause ‘safe-haven’ currencies such as the yen and the Swiss franc to outperform.”

The yen traded at 80.13 per dollar as of 8:26 a.m. in Tokyo from 80.10 in New York yesterday, when it rose to 79.98, the highest level since May 5. Japan’s currency was at 116.88 per euro from 116.75. The euro was at $1.4586 from $1.4576 yesterday, when it touched $1.4658, the strongest since May 5.

The franc bought 83.51 centimes per dollar from 83.46 yesterday, when it rose to an all-time high of 83.28. The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, fetched 73.988 from 73.989 yesterday, when it reached 73.640, the weakest since May 5.

An index of U.S. economic optimism fell to 42.0 in June from 42.8 in May, according to a Bloomberg News survey of economists before today’s report. A reading over 50 indicates a positive outlook.

Germany’s exports, adjusted for work days and seasonal changes, dropped 3 percent in April from March, when they rose 7.3 percent, a separate Bloomberg survey showed. The Federal Statistics Office in Wiesbaden releases the data tomorrow.

--Editors: Jonathan Annells, Naoto Hosoda

To contact the reporter on this story: Ron Harui in Singapore at rharui@bloomberg.net; Kristine Aquino in Singapore at kaquino1@bloomberg.net

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net


We Almost Lost the Nasdaq
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus