The following data were published:
00:30 Australia RBA Meeting's Minutes (Nov)
05:00 Japan Leading Economic Index (Sep) 100.9 89,2 89,2
05:00 Japan Coincident Index (Sep) 89.4 100,8 100,8
09:30 UK RPI-X (October) Y/Y 4.7% 5,5%
09:30 UK Retail prices (October) Y/Y 4.2% 5,0%
09:30 UK Retail prices (October) 0,1% 0,5%
09:30 UK HICP ex EFAT (October) Y/Y 2,2% 2,2%
09:30 UK HICP (October) Y/Y 4.5% 5,2%
09:30 UK HICP (October) -0.2% 0,1% 0,5%
The yen gained against the euro and the dollar as stocks tumbled on the
prospect of a global recession, prompting investors to sell
higher-yielding assets to pay back low-cost loans in Japan's currency.
The yen also rose against the Australian dollar after the Reserve Bank
of Australia said it favored lower borrowing costs. The dollar advanced
against the euro amid speculation overseas investors bought more of the
safest U.S. assets as the global economy slumps.
``Weaker equities are playing into the theme of risk aversion, which is
supporting the yen,'' said Derek Halpenny, head of global currency
strategy in London at Bank of Tokyo- Mitsubishi Ltd. ``We are going to
see the dollar gradually drift lower against the yen if this scenario
continues.''
The yen's rise came as stocks in Europe and Asia declined for a second
day, led by financial companies and commodity producers, and U.S. index
futures fell on concern the deepening recession will erode profits.
``The yen continues to gain momentum today because of the retraction in
risk appetite,'' said Neil Jones, head of European hedge fund sales in
London at Mizuho Capital Markets. ``The world is not over the worst of
things so the next big leg ahead for the yen is to strengthen.'' The
dollar may fall to 86 yen by March, he said.
``I am very, very bullish on the dollar,'' said Michael Klawitter, a
currency strategist at Dresdner Kleinwort in Frankfurt. ``The main
story that we are seeing at the moment is the high perception of risk
and that leading to capital repatriation back into the U.S.'' The U.S.
currency may gain to $1.05 per euro and 103 yen by June, Klawitter
forecast.
EUR/USD got support at $1.2570, before bounced back to the middle of the day's range
$1.2630.