Monday March 10, 2008 - 20:41:17 GMT
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Reuters - www.reuters.com
FOREX NEWS-Yen, Swiss franc rise on higher risk aversion
(Recasts, updates prices, adds comment, changes byline)
By Gertude Chavez-Dreyfuss
NEW YORK, March 10 (Reuters) - The yen and Swiss franc
firmed broadly on Monday as U.S. stocks fell on credit-related
worries, prompting investors to reduce exposure to risky assets
and unwind trades funded by the Japanese and Swiss currencies'
The yen approached eight-year highs against the dollar
while the Swiss franc rose to roughly two-year peaks against
the euro and was within striking distance of its record high
against the greenback.
The dollar, meanwhile, steadied against the euro after
Europe's top monetary officials expressed concern about
excessive movements in currency exchange rates.
In the stock market, U.S. equities fell, led by financial
shares such as Ambac Financial (ABK.N: Quote, Profile, Research), down 23 percent and
Bear Stearns (BSC.N: Quote, Profile, Research), which fell 11 percent.
"Risk aversion is definitely a function of the market, with
North American equities trading heavily today," said Shane
Enright, a currency strategist at CIBC World Markets in
"The carry currencies are struggling -- the New Zealand and
Australian dollars. And the yen is usually a beneficiary of
higher risk aversion and it has continued to strengthen," he
The greenback hit a session low of 101.57 yen <JPY=>, just
shy of Friday's eight-year low around 101.40 yen, before edging
back in late afternoon to 101.75 yen, down 0.9 percent on the
Traders said they were keeping an eye on the key 100-yen
level against the dollar last seen more than a decade ago.
"The elevated state of nervousness in the market means a
move to 100 yen looks inevitable," said Omer Esiner, market
analyst at Ruesch International in Washington.
AUSSIE, KIWI FALL
The euro fell to one-week lows against the yen to 155.96,
before trading back up to 156.10 <EURJPY=>, still down 1
percent from late on Friday.
The high-yielding Australian <AUDJPY=> and New Zealand
dollars <NZDJPY=> fell 2.1 percent and more than 1 percent
against the yen, respectively.
The Swiss franc, meanwhile, climbed against the euro, which
fell to 1.5621 <EURCHF=>, the lowest since July 2006. The
currency pair last traded at 1.5644, down 0.6 percent. The
dollar dropped 0.6 percent against the Swiss franc to 1.0192
<CHF=>. On Friday, the greenback hit a record low at 1.0136
The dollar, on the other hand, was up slightly against the
euro, which traded at $1.5347. The euro had hit a record peak
against the dollar Friday around $1.5459, following a report
showing the U.S. economy unexpectedly shed 63,000 jobs last
The euro's surge was also halted on Monday, after European
Central Bank President Jean-Claude Trichet said the central
bank was concerned about "excessive exchange rate moves."
His comments were echoed by Klaus Regling, director-general
of the European Commission's monetary affairs department, and
Joaquin Almunia, the European Economic and Monetary Affairs
Commissioner. For stories, see [ID:nBRU006387] and
A spate of dismal U.S. economic data, capped by Friday's
payrolls report, has stoked recession concerns and left
investors ready for more rate cuts, either at the Federal
Reserve's next policy meeting on March 18 or sooner.
Goldman Sachs said in a research note Monday an emergency
Fed cut is possible ahead of March 18. It changed its view on
Fed policy on Friday after the U.S. payrolls data.
(Additional reporting by Steven C. Johnson; Editing by
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