Sun, Aug 19, 2012 - Page 15 News List

Euro advances against dollar, yen

Bloomberg

The euro touched a six-week high this week versus the yen as German Chancellor Angela Merkel’s support for measures to protect the common currency spurred optimism the region’s debt crisis will be contained.

Meanwhile, the US dollar advanced against the majority of its most-traded counterparts as speculation receded that the US Federal Reserve would increase its monetary stimulus amid stronger-than-forecast economic data. Japan’s currency dropped five consecutive days against the US dollar, retreating 1.6 percent to ¥79.56.

However, the greenback declined 0.4 percent this week to US$1.2319 per euro. The euro also gained 2 percent to ¥98.13, after climbing on Friday to ¥98.41, the most since July 6.

The yen fell against the dollar as yields on Treasuries due in two years touched 0.29 percent on Thursday, the highest since July 5.

“Dollar-yen has stayed lower, longer than you would expect, particularly as yields in the US have risen fairly dramatically,” Camilla Sutton, chief currency strategist at Bank of Nova Scotia’s Scotiabank unit in Toronto, said in a phone interview. “Over the last few sessions, we’re finally seeing dollar yen break out of its range and back towards 80.”

Australia’s dollar fell 1.5 percent for the week, the biggest drop since May 18, before the Reserve Bank of Australia releases next week minutes of its Aug. 7 meeting, where policymakers left the key interest rate at 3.5 percent.

Models used by the IMF and other analysts show “the Australian dollar is overvalued compared to its medium- to long-run equilibrium value,” an Australian Treasury report on its Web site on Friday said.

Britain’s currency was little changed over the week and touched US$1.5745, the most since July 30. It fell 0.2 percent to £0.7845 per euro.

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