The dollar fell for a second day against the euro Monday as Fannie Mae reported a
larger-than-expected $2.19 billion loss, indicating the worst of financial-market
turmoil may not be over. The currency also weakened versus the yen after the
largest U.S.
mortgage-finance company said it will cut its dividend and raise $6 billion in
capital.
The yen may strengthen about 5% to Y100 in the next three months on speculation investors will
cut holdings of higher-yielding assets as housing and economic growth slow
further, according to a UBS AG note to investors today. The Bank of Japan held
its target rate at 0.5 percent last week.Federal Reserve Chairman Ben S. Bernanke said yesterday mortgage
delinquencies will weigh on the economy, adding to speculation policy makers
will cut borrowing costs.
Crude oil rose above $122 a barrel for the first time in New York
on threats to supply in Nigeria
and Iraq
and growing global fuel consumption.
The euro earlier rose against the dollar on a European Union report showing
producer-price inflation accelerated more than forecast in March, increasing
pressure on the European Central Bank to keep interest rates on hold.EUR/USD recovered from $1.5450 on stronger than
expected eurozone PMI data back to $1.5500. Bids on $1.5455/45 dragged the euro
down to $1.5520
GBP/USD recovered off post CIPS release lows of
$1.9635 and extended gains to the offers zone between $1.9771.
USD/JPY fell from Y105.12 to Y104.40 and then – to
Y104.00.
Today there are a lot of economic
releases. In Europe the schedule includes UK industrial production and EU
retail sales.
Among US data the Q1 productivity and
labor costs figures come at 12:30 GMT.