Yen Gains

The yen rose for a third day against the euro as concern the global recession will worsen helped push down Asian shares and U.S. stock futures.

“Worries that Europe’s response to its recession is lagging behind other countries is causing risk aversion,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. “The yen is being bought and may strengthen” to 127.55 per euro and 98.51 against the dollar today, he said.

Japan’s Nikkei 225 Stock Average fell 0.7 percent and the Standard & Poor’s 500 Index futures dropped 0.8 percent.

Dollar Index

The Dollar Index climbed for a fifth day, its longest run of gains since January, before the Conference Board releases its index of leading U.S. economic indicators today. The gauge fell 0.2 percent in March, after dropping 0.4 percent in February, according to a Bloomberg survey of economists.

President Barack Obama said yesterday he will demand “accountability” from any U.S. banks that require additional taxpayer money following “stress tests” being conducted by regulators. The tests are being used to determine whether the companies have enough capital to cover losses over the next two years should the economic recession worsen.

“The policies being taken by the Obama administration are fast and comprehensive and there are signs the recession there is waning,” said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan’s largest currency broker. “This is positive for the dollar.”

The Dollar Index, which the ICE uses to track the greenback against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona, rose to 86.083 from 85.981.

Lower Volatility

Gains in the yen may be tempered after the JPMorgan Chase & Co. benchmark index of investor expectations for currency swings dropped to a six-month low of 14.4 percent on April 17.

Lower currency volatility indicates smaller exchange-rate fluctuations that can erode profit on so-called carry trades. This strategy involves borrowing funds in countries with lower interest costs, such as Japan, and investing them in nations with higher rates, allowing investors to pocket the difference.

“Big currency moves are behind us,” said Maxime Tessier, chief of foreign exchange at Montreal-based Caisse de Depot et Placement du Quebec, Canada’s biggest pension fund manager, with C$120 billion ($98.6 billion) in assets. “The volatility spike has to unwind itself over time. Selling volatility has been the winning trade so far this year and will continue to work well.”

The benchmark interest rate is 0.1 percent in Japan and as low as zero in the U.S., compared with 3 percent in Australia and in New Zealand.

The Korean won fell against the dollar and the yen as importers took advantage of its recent gains to convert funds into dollars. The currency rose 5.3 percent in the past month as overseas investors increased bets on emerging-market assets amid signs the global recession is easing.

“There are not a small amount of import deals coming in,” said Roh Sang Chil, a currency dealer at Kookmin Bank in Seoul. “But the won is supported as foreigners remained net buyers of stocks, supplying the market with foreign exchange.”

Worsening Economy

The euro weakened against 13 of the 16 most-active currencies this month on signs the recession in the 16-nation region is deepening. Germany’s ZEW Center for European Economic Research in Mannheim may say tomorrow its gauge of current conditions fell to minus 90 in April, the lowest since September 2003, from 89.4 in March, according to a Bloomberg News survey.

ECB governing council member Miguel Angel Fernandez Ordonez will speak in Madrid tomorrow, and vice-president Lucas Papademos will speak in Strasbourg, France on the same day.

“There are cleavages on the unwieldy decision-making ECB governing council,” said Sue Trinh, senior currency strategist at RBC Capital Markets in Sydney. “The market sees the apparent disunity as a reason to sell the euro.”

ECB council member Axel Weber said last week the bank shouldn’t lower its 1.25 percent benchmark rate below 1 percent, putting him in conflict with policy makers who say borrowing costs can drop below that level. Council members George Provopoulos from Greece and Athanasios Orphanides of Cyprus have indicated they may support cutting the target rate below 1 percent and buying debt to pump money into the economy, a policy known as quantitative easing.

The ECB will lower its benchmark rate by a quarter- percentage point at its next meeting on May 7, according to a Bloomberg News survey of economists.

Euro falls to one-month low on concern Europe economy to worsen

The euro fell to a one-month low against the dollar and weakened against the yen on concern the European economy will deteriorate as central bank officials disagree on the measures needed to combat the recession.

The yen rose versus all of the 16 most-active currencies as speculation the global slump will deepen spurred investors to cut holdings of higher-yielding assets. The Dollar Index approached the highest level in three weeks on prospects a U.S. report today will show a gauge of the economy’s outlook improved. The South Korean won was the biggest decliner against the greenback as importers may be taking advantage of six weeks of gains to pay their bills.

“Investors fear that European policy makers aren’t doing enough to safeguard the economy,” said Danica Hampton, a currency strategist at Bank of New Zealand Ltd. in Wellington. “Any sign that the euro zone economy is deteriorating will likely add to the downward pressure on the euro.”

The euro dropped to $1.3007 as of 1:26 p.m. in Tokyo from $1.3044 in New York on April 17. It earlier declined to $1.2967, the lowest level since March 17. Europe’s currency fell to 128.55 yen from 129.33 yen, after touching 128.17, the weakest since March 30.

The yen climbed to 98.82 per dollar from 99.16 last week. It advanced to 56.02 versus the New Zealand dollar from 56.32, and rose to 71.02 versus the Australian currency from 71.64. The won declined 0.7 percent to 1,341.35 per dollar.

RUPEE/POUND STERLING,RUPEE/EURO

RUPEE/POUND STERLING

Rupee remained in the positive territory versus Pound Sterling amid significant decline in its demand. The cable kicked off new week’s trading at Rs.117/95 on Tuesday, gave up hefty grounds and was trading at Rs.112/75 at close of markets. Thus, rupee recovered Rs.5/20 paisas against the British currency.

RUPEE/EURO

The single currency incurred major losses against rupee in the open market dealings this week. Euro set off trading at Rs.107/95, recorded losses and was changing hands at Rs.104/85 showing net loss of Rs.3/10 at close of markets on Saturday. In the international market, the euro hit a weekly low of $1.3258, severely testing the strength of long-term technical support at the 200-week moving average of $1.3380. The currency was down 2.5 percent for the week, its worst against the dollar since January 25. The euro slid 2.6 percent against the yen to 130.13 yen, while the dollar was down 0.8 percent at 97.910. The euro's decline was initially triggered by remarks from Germany's Steinbrueck earlier in the session. The finance minister said: "Germany, as a member of the EU, has a massive interest in the credibility of the Stability and Growth Pact, which, as you know, is not taken so seriously by some." "If it is not taken seriously, I am telling you, the euro will have trouble one day in terms of its own credibility and stability," he told the German Parliament. The euro was also weighed down by weaker-than-forecast euro zone industrial orders and German inflation data. The reports also fanned quantitative easing prospects at the ECB.

RUPEE/US DOLLAR

The national currency continued to incur losses against the American dollar amid demand of US currency rose in the kerb market. The US dollar commenced new week’s trading on Tuesday since Monday 23rd march was the Pakistan day holiday at Rs.80/10, continued make post gains on the local desk and was trading at Rs.80/20 at close of markets on Saturday. Thus, rupee gave up another 0/10 paisas versus dollar in the kerb market. On the international desk, the dollar rose on Friday, posting its largest one-day gain against the euro in more than two months, boosted by a growing view that the European Central Bank may be the next to purchase its own bonds to stimulate growth. Weak U.S. stocks also drew safe-haven bids toward the dollar compared with the single euro-zone currency. The currency was further pressured by comments from German Finance Minister Peer Steinbrueck suggesting fiscal irresponsibility in Europe could put the euro at risk.

Other Currencies

Other Currencies
Currency	Symbol	Units per USD	USD per Unit
Afghanistan Afghanis	AFN	47.01	0.0213
Albania Leke	ALL	97.335	0.0103
Algeria Dinars	DZD	71.58	0.014
Argentina Pesos	ARS	3.6885	0.2711
Bahamas Dollars	BSD	1	1
Bahrain Dinar	BHD	0.377	2.6525
Bangladesh Taka	BDT	68.4	0.0146
Barbados Dollars	BBD	1.975	0.5063
Bermuda Dollars	BMD	1	1
Brazil Reais	BRL	2.2065	0.4532
Bulgaria Leva	BGN	1.451	0.6892
CFA BCEAO Francs	XOF	486.6561	0.0021
CFA BEAC Francs	XAF	486.6561	0.0021
Chile Pesos	CLP	574.2585	0.0017
China Yuan	CNY	6.8353	0.1463
Colombia Pesos	COP	2412	0.0004
Comptoirs Francais du Pacifique Francs	XPF	88.5325	0.0113
Costa Rica Colones	CRC	562.5	0.0018
Croatia Kuna	HRK	5.4983	0.1819
Czech Republic Koruny	CZK	19.6411	0.0509
Danish Krone	DKK	5.5261	0.181
Dominican Republic Pesos	DOP	35.834	0.0279
East Caribbean Dollars	XCD	2.62	0.3817
Egypt Pounds	EGP	5.6177	0.178
Estonia Krooni	EEK	11.6083	0.0861
Fiji Dollars	FJD	1.7662	0.5662
Hong Kong Dollar	HKD	7.75	0.129
Hungary Forint	HUF	219.4581	0.0046
Iceland Kronur	ISK	119.6098	0.0084
IMF Special Drawing Rights	XDR	0.6666	1.5001
Indian Rupee	INR	49.9337	0.02
Indonesia Rupiahs	IDR	11426.6281	0.0001
Iran Rials	IRR	9928	0.0001
Iraq Dinars	IQD	1155.6	0.0009
Israel New Shekels	ILS	4.1662	0.24
Jamaica Dollars	JMD	87.9957	0.0114
Jordan Dinars	JOD	0.708	1.4124
Kenya Shillings	KES	79.7	0.0125
Kuwaiti Dinar	KWD	0.2907	3.4397
Lebanon Pounds	LBP	1502	0.0007
Malaysian Ringgit	MYR	3.5728	0.2799
Mauritius Rupees	MUR	33.3695	0.03
Mexico Pesos	MXN	13.5639	0.0737
Morocco Dirhams	MAD	8.3004	0.1205
NewZealand $	NZD	1.7112	0.5844
Norwegians Krone	NOK	6.5407	0.1529
Omani Riyal	OMR	0.385	2.5974
Peru Nuevos Soles	PEN	3.11	0.3215
Philippines Pesos	PHP	47.6296	0.021
Poland Zlotych	PLN	3.2967	0.3033
Qatari Riyal	QAR	3.6411	0.2746
Romania New Lei	RON	3.1102	0.3215
Russia Rubles	RUB	33.35	0.03
Saudi Riyal	SAR	3.7449	0.267
Singapore Dollar	SGD	1.5048	0.6645
South Africa Rand	ZAR	9.0454	0.1106
South Korea Won	KRW	1334.5451	0.0007
Sri Lanka Rupees	LKR	116.05	0.0086
Sudan Pounds	SDG	2.3053	0.4338
Swedish Korona	SEK	7.9636	0.1256
Swiss Franc	CHF	1.1317	0.8837
Taiwan New Dollars	TWD	33.123	0.0302
Thai Bhat	THB	35.3725	0.0283
Trinidad and Tobago Dollars	TTD	6.2752	0.1594
Tunisia Dinars	TND	1.3851	0.722
Turkey New Lira	TRY	1.5789	0.6334
Venezuela Bolivares Fuertes	VEF	2.15	0.4651
Vietnam Dong	VND	17770	0.0001
Zambia Kwacha	ZMK	5690	0.0002