RTRS: Dollar, yen up on U.S. auto, Spain bank woes
The dollar and yen rallied on Monday as renewed trouble in the U.S. auto sector dented investors' risk appetite, while Spain's first bank bailout since the start of the financial crisis compounded the euro's losses.
With risk appetite rapidly receding, the dollar and yen also posted sharp gains against so-called high yielders such as the Australian and New Zealand dollars.
The euro also remained under pressure ahead of the European Central Bank's policy meeting and a G20 summit in London, both taking place on Thursday.
"Risk aversion is the main play," said Geoffrey Yu, currency strategist at UBS. "But it should not distract from the key events this week -- the ECB and G20 -- where risks are biased against the euro," he said.
By 1201 GMT, the euro was down 0.9 percent on the day at $1.3177, having broken through long-term support at the 200-week moving average last Friday around $1.3380.
The single currency was down 2.1 percent against the yen at 127.20 yen. It briefly fell more than 4 yen from a session high to hit a low of 126.44 yen.
The dollar index, a measure of the dollar's value against six major currencies, was up 0.6 percent on the day at 85.68 .DXY.
The Australian dollar was down 1.9 percent at $0.6801 while the New Zealand dollar fell 1.4 percent at $0.5617.
The dollar was down 1.9 percent against the Japanese currency at 96.05 yen.
The Obama administration rejected restructuring plans for General Motors (GM.N) and Chrysler, and the Spanish government said the Bank of Spain will bail out regional savings bank Caja Castilla la Mancha, renewing worries about financials.
The White House said it would only fund GM for the next 60 days, while it develops a more convincing restructuring plan, with GM Chief Executive Rick Wagoner forced out.
This sent global equities and government bond yields hurtling lower as investors cut risk exposure wherever they could.
European shares were down 2.4 percent in midday trade .FTEU3
ECB, G20 IN SPOTLINGHT
Despite the improvement in risk appetite over the last few weeks, "there were still a few banana skins out there," said Daragh Maher, deputy head of global FX strategy at Calyon.
