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Dollar sinks to fresh 14-year low vs yen

11/27/09 00:20 EST

TOKYO -The dollar sank to a fresh 14-year low against the yen Friday in Asia as worries about Dubai's debt mountain drove investors to buy safe haven assets like the yen.

The Japanese currency briefly touched 84.41 yen — the lowest since mid-1995 — before bouncing back to 86.05 yen. The euro, meanwhile, weakened to $1.4931 from $1.5021 late Thursday.

Concerns about debt problems afflicting Dubai have caused investors to flee riskier assets. Dubai World, a government investment fund with debts totaling around $60 billion, has asked creditors if it can postpone payments until May.

The move toward higher-yielding investments in emerging markets had been growing recently on hopes the world was recovering from the financial crisis. But Dubai's problems have reminded investors of the risks involved, said Minoru Shioiri, chief manager at the foreign exchange section of Mitsubishi UFJ Securities in Tokyo.

"Everyone wants to pull back on the risks, cash in on investments in emerging markets and make an exit," he said.

Finance Minister Hirohisa Fujii said the yen's sharp rise against the dollar is "one-sided" and reiterated concern that it would hurt the nation's export-dependent economy.

Fujii suggested Tokyo may ask for cooperation from the United States and European nations to calm markets. "That may be one of the options we could take depending on conditions," he said, according to Kyodo News agency.

Expectations that U.S. interest rates will remain extremely low are also weighing on the dollar, which has slid steadily over the last few weeks.

Traders remain unconvinced that Japanese authorities will intervene in the currency market to stem the yen's appreciation. Japan hasn't done that since March 2004.

"What the market wants is for (Fujii) to go a step further and say he is actually going to do something. Unless he becomes more specific about taking action, it's not convincing enough," said Akane Vallery Uchida, foreign exchange strategist at the Royal Bank of Scotland.

The dollar has steadily dropped this week after minutes from the latest U.S. Federal Reserve board meeting suggested the central bank wasn't worried about the dollar's decline and that it plans to keep interest rates at "exceptionally low levels" for an "extended period."

Currently the Fed funds rate stands at a range between zero and 0.25 percent, one of the lowest in the world.

Japan's business executives are clearly worried about the yen's appreciation, which cuts into foreign income, on top of falling prices and general weakness in consumer spending.

Fujio Mitarai, chairman of Keidanren, Japan's largest business lobby, urged the government to take action.

"In the midst of deflation, such a sharp rise in the yen is a very serious problem and could drag down the economy," Mitarai told reporters.

Associated Press Writers Yuri Kageyama and Tomoko A. Hosaka contributed to this report.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
COMMENTS ( 31 )
Page 1 of 7 1 2 3 4 5 6 7 Next >>
DKJAW12
6:48PM Nov 19 2009 
Take a look at this I found. You can get a 4 day free trial for a trading system that works with Forex, Futures, Stocks, Bonds and Commodities. Just go to http://forex-currencyexchange.com and click the top left link.
REPLY RATING
(0 RATINGS)
 
HrrPa9
11:47AM Oct 29 2009 
HBaldo there in lies the question. We continue this assinine attempt to control the intractable with the elected/appointed best and brightest. It never works and never will. So much of U.S. profits remain overseas that such transfers as happens tend to be of quantitative amounts that currency valuations become rocky at best. Small timers can only act as trailers. We find at closer examination most politicians are already quite wealthy. Their pursuits remain vain attempts at self agrandisement. The moral and ethical reasons our founder's had has been replaced by such vanity that effective representation and governing by rational decision making has been reduced to a snickering event.
REPLY RATING
(1 RATINGS)
 
HBaldo
4:21PM Oct 22 2009 
Yes, what to do! The Fed attempted market operations in the 80's but it became evident that the market was so big that it was soon realized that intervention to control the exchange rate of such a massive economy was impossible. What is driving the Euro/$ rate are market forces and many other conditions such as capital flight to and from the US. There are probably people out there who may have an understanding of the relative importance of the significant variables at different times and are benefiting from the decline of the Dollar. However, their knowledge is price sensitive information they are not going to share with world. Unfortunately those individuals will not work for the Fed or the Treasury for many good reasons, compensation probably being one of them. A really knowledgeable trader will receive compensation no government official could ever receive. It appears that even the government actions to regulate foreign exchange related derivatives used for hedging purposes will make it even more difficult for corporations to shield themselves from foreign adverse exchange fluctuations.

Thus, media talk about the government’s failure to step in and force a desired Euro/$ rate is really no more than an expression of faith on the omnipotent power of the government. Given the serious dislocations of the world economy from the Fed keeping domestic rates too low for too long and contributing to the real estate bubble is an indication that all of the government’s economists together simply cannot match the performance of many private sector business analysts. What amazes me to no end is that the journalists completely ignore the Fed/Treasury’s statements in the 80’s that the foreign exchange market for US Dollars is so large as to be beyond control by the government authorities.
REPLY RATING
(2 RATINGS)
 
HBaldo
4:21PM Oct 22 2009 
Yes, what to do! The Fed attempted market operations in the 80's but it became evident that the market was so big that it was soon realized that intervention to control the exchange rate of such a massive economy was impossible. What is driving the Euro/$ rate are market forces and many other conditions such as capital flight to and from the US. There are probably people out there who may have an understanding of the relative importance of the significant variables at different times and are benefiting from the decline of the Dollar. However, their knowledge is price sensitive information they are not going to share with world. Unfortunately those individuals will not work for the Fed or the Treasury for many good reasons, compensation probably being one of them. A really knowledgeable trader will receive compensation no government official could ever receive. It appears that even the government actions to regulate foreign exchange related derivatives used for hedging purposes will make it even more difficult for corporations to shield themselves from foreign adverse exchange fluctuations.

Thus, media talk about the government’s failure to step in and force a desired Euro/$ rate is really no more than an expression of faith on the omnipotent power of the government. Given the serious dislocations of the world economy from the Fed keeping domestic rates too low for too long and contributing to the real estate bubble is an indication that all of the government’s economists together simply cannot match the performance of many private sector business analysts. What amazes me to no end is that the journalists completely ignore the Fed/Treasury’s statements in the 80’s that the foreign exchange market for US Dollars is so large as to be beyond control by the government authorities.
REPLY RATING
(0 RATINGS)
 
LGBAILEY
7:58PM Oct 21 2009 
for any foreign exchange conversion try xe.com. It is the best....
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(0 RATINGS)
 
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