Friday May 1, 2009 - 10:44:35 GMT
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Reuters - www.reuters.com
FOREX NEWS-Yen, dlr fall as shares rise, sentiment improves
* Yen falls broadly, hits 2-wk low vs euro, dollar
* Euro/dollar up as demand for risk improves
* Aussie dlr jumps 1.7 pct vs yen; Chysler news brushed off
* U.S. ISM manufacturing data due at 1400 GMT
(Updates prices; changes byline, dateline; previous SYDNEY)
By Jessica Mortimer
LONDON, May 1 (Reuters) - The yen fell to two-week lows
against the dollar and the euro on Friday, while the dollar also
fell versus both the euro and perceived higher-risk currencies
as investors hope the worst may be over for the global economy.
Risk appetite has been boosted by recent global economic
data and a note of optimism from the U.S. Federal Reserve
earlier this week.
Currencies regarded as higher-risk such as the Australian
dollar benefited strongly, and a rise in U.S. stock futures also
helped sentiment with the S&P 500 futures SPc1 up 0.3 percent.
Trading was thin and relatively volatile, however, with
European markets closed due to the May Day holiday.
"It's very quiet, with movements largely flow-driven, but
there's still a slight bid to risk," RBC Capital Markets
currency strategist Christian Lawrence said.
"Currencies continue to be driven by equities and risk
appetite and the riskier, commodity-based currencies have
outperformed against the perceived safe-haven yen and dollar,"
At 1011 GMT, the euro rose 1.2 percent against the yen to
131.86 yen, just shy of an earlier two-week high around 132.00
yen <EURJPY=R>, while the dollar gained 0.8 percent to 99.34 yen
<JPY=>, having hit a two-week high around 99.58 yen.
The euro rose 0.4 percent against the dollar to $1.3272
<EUR=>, which helped to push the dollar's trade-weighted index
down 0.3 percent to 84.554 .DXY.
The Australian dollar jumped 0.9 percent against the dollar
to $0.7325 <AUD=> and by 1.7 percent against the yen, hitting a
two-week high around 72.82 yen <AUDJPY=R>.
The New Zealand dollar rose 1.2 percent against the dollar
to $0.5718 <NZD=>, while the Canadian dollar was also firmer,
with the U.S. dollar down 0.5 percent at C$1.1880 <CAD=>.
ISM DATA AWAITED
The U.S. ISM report on manufacturing is due at 1400 GMT and
is expected to mark an improvement after economic reports showed
that business activity in the U.S. Midwest contracted at a much
less severe rate in April.
Investors were encouraged by data overnight showing that
Chinese manufacturing activity gained further momentum in April
[ID:nPEK279290], as well as by Friday's better-than-expected UK
manufacturing survey [ID:nLU86907].
"The Chinese PMI data showed a further rebound and this has
given more support to commodity currencies and put the yen under
more pressure," BNP Paribas currency strategist Ian Stannard
For the time being, the market brushed off a number of
factors lurking in the background that could dent appetite for
risk, but investors remained cautious.
News emerged that U.S. automaker Chrysler has filed for
bankruptcy [ID:nSP457891], intensifying concerns about the fate
of U.S. automakers, while next week's release of the results of
U.S. stress tests on banks will be closely monitored.
A source familiar with administration talks said the stress
tests announcement -- originally scheduled for Monday -- had
been pushed back, possibly to May 6, and that officials are
leaning towards results of individual banks rather than summary
Sentiment also remains vulnerable to any news that may hint
at a flu pandemic that would be severe enough to dent global
economic recovery as Mexico began shutting down parts of its
economy to slow the spread of the virus. nFLU.
(Reporting by Jessica Mortimer; editing by Stephen Nisbet)
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