The yen rose to a two-week high against the euro as concern
credit-market losses will widen prompted investors to pare holdings of
higher-yielding assets funded in the Japanese currency.The yen advanced
versus the New Zealand dollar and the South African rand, favorites for
so-called carry trades, as stocks slumped after Standard & Poor's
lowered its debt rating on three of Wall Street's biggest securities
firms. The currency extended gains after the Wall Street Journal
reported Lehman Brothers Holdings Inc. may raise as much as $4 billion
of extra capital, citing unidentified executives.
The dollar may fall before a government report today that will probably
show weakness in U.S. manufacturing, showing there is less need for the
Federal Reserve to raise interest rates.
The euro may be supported by speculation data will show the prices
European companies pay for goods and services rose at the fastest pace
in almost eight years, giving the European Central Bank less scope to
lower borrowing costs.EUR/USD traded within $1.5517/45.
GBP/USD retreated from $1.9660 to $1.9610.
USD/JPY firmed from Y104.30 to offers Y104.66.
Eurozone data sees the first details of Q1 GDP data as well as April
PPIat 0900GMT. The GDP should be 0.7% q/q, 2.2% y/y with industrial PPI
at0.8% m/m, 6.1% y/y.