BS: Yen Pares Advances as Putin Speaks on Crimea; Euro Erases Loss
The yen pared its advance against most major currencies after President Vladimir Putin said Russia isn’t seeking to split Ukraine, reducing the safe haven appeal of the Japanese currency.
The euro erased its loss versus the dollar, after weakening earlier on an industry report that showed German investor confidence dropped to the lowest level since August. Putin supported a request from Ukraine’s separatist region of Crimea to join Russia, defying U.S. and European Union sanctions in the worst standoff between Russia and the West since the Cold War.
“The market’s taking a view that Russia’s signaled Crimea’s situation doesn’t extend to other parts of eastern Ukraine,” Alan Ruskin, the global head of Group of 10 foreign exchange at Deutsche Bank AG in New York, said in a telephone interview. “The market was worried this goes over and beyond Crimea and sanctions related to that will broaden. That can be very disruptive for global market. So far that hasn’t happened.”
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The yen strengthened as much 0.4 percent before trading at 101.58 per dollar at 8:26 a.m. in New York, up 0.2 percent. The Japanese currency rose 0.1 percent to 141.49 per euro. The 18-nation European currency traded at $1.3927 after falling 0.2 percent earlier to $1.3890.
Crimea voted on March 16 to join Russia, which should sign a treaty accepting the peninsula’s accession, according to an order signed by Putin and published on a government website today. The U.S. and European Union imposed sanctions on Russian officials and threatened to take further measures.
German Confidence
The euro weakened earlier after a report showed German investor confidence fell for a third month in March. The ZEW Center for European Economic Research’s index of investor and analyst expectations, which aims to predict economic developments six months in advance, dropped to 46.6 from 55.7 in February. A Bloomberg of economists forecast a decline to 52.
Federal Reserve policy makers are starting a two-day meeting today. The central bank will probably scrap its 6.5 percent jobless rate threshold to adopt qualitative guidance for signaling when it will consider raising the benchmark interest rate, economists said in a Bloomberg survey. Unemployment has fallen to 6.7 percent from 7 percent in November.
The Federal Open Market Committee will also announce a $10 billion cut in monthly bond buying to $55 billion and continue reductions at that pace at every meeting before announcing an end to the program at its Oct. 28-29 gathering, according to the median of responses in the survey.
To contact the reporter on this story: Andrea Wong in New York at awong268@bloomberg.net
To contact the editors responsible for this story: Dave Liedtka at dliedtka@bloomberg.net Greg Storey
