Dollar hits 4.5 year high against yen
Thursday, 14 June 2007
TOKYO, June 13 (AFP): The dollar jumped to the highest level against the yen for four and a half years today as investors sought safe havens amid growing worries about higher interest rates, dealers said.
They said the dollar also traded close to an 11-week peak against the euro in Asian trade as players braced for the release of a politically sensitive US Treasury report on foreign-exchange policy.
The dollar rose to as high as 122.30 yen in Tokyo afternoon trade, levels last seen in December 2002, up from 121.66 in New York late Tuesday.
The euro eased to 1.3287 dollars at one point, the lowest level since late March, before recovering to 1.3305 by late afternoon, after 1.3301 in New York. The euro rose to 162.63 yen from 161.85.
Investors grew more risk averse after US bond yields surged to five-year highs on worries tighter global monetary policy could push up companies' borrowing costs and undermine their profits, dealers said.
"This is not just simply a story about interest rate differentials but also that bonds and shares are being cashed in," said Saburo Matsumoto, chief forex strategist at Sumitomo Trust Bank.
Bank of England governor Mervyn King meanwhile warned in a speech Tuesday that the British central bank may have to raise interest rates again from a six-year high of 5.50 per cent to curb inflation.
News that China's inflation rate accelerated to a rate of 3.4 per cent in May raised speculation of another interest rate hike there, dealers said.
The dollar firmed to 1.5409 Singapore dollars from 1.5394 Tuesday, to 931.10 South Korean won from 929.35 and to 9,065 Indonesian rupiah from 9,040.
It rose to 33.022 Taiwan dollars from 33.015 and to 46.72 Philippine pesos from 46.34 but eased to 32.44 Thai baht from 32.59.
They said the dollar also traded close to an 11-week peak against the euro in Asian trade as players braced for the release of a politically sensitive US Treasury report on foreign-exchange policy.
The dollar rose to as high as 122.30 yen in Tokyo afternoon trade, levels last seen in December 2002, up from 121.66 in New York late Tuesday.
The euro eased to 1.3287 dollars at one point, the lowest level since late March, before recovering to 1.3305 by late afternoon, after 1.3301 in New York. The euro rose to 162.63 yen from 161.85.
Investors grew more risk averse after US bond yields surged to five-year highs on worries tighter global monetary policy could push up companies' borrowing costs and undermine their profits, dealers said.
"This is not just simply a story about interest rate differentials but also that bonds and shares are being cashed in," said Saburo Matsumoto, chief forex strategist at Sumitomo Trust Bank.
Bank of England governor Mervyn King meanwhile warned in a speech Tuesday that the British central bank may have to raise interest rates again from a six-year high of 5.50 per cent to curb inflation.
News that China's inflation rate accelerated to a rate of 3.4 per cent in May raised speculation of another interest rate hike there, dealers said.
The dollar firmed to 1.5409 Singapore dollars from 1.5394 Tuesday, to 931.10 South Korean won from 929.35 and to 9,065 Indonesian rupiah from 9,040.
It rose to 33.022 Taiwan dollars from 33.015 and to 46.72 Philippine pesos from 46.34 but eased to 32.44 Thai baht from 32.59.