Dollar, yen weaker; ECB, G20 decisions ahead Traders poured into currencies from countries that are heavily dependent on commodities on Thursday on hopes that leaders from the world's top countries will boost the resources of the International Monetary Fund to prop up ailing emerging-market economies. The Australian, New Zealand and Canadian dollars climbed by over 1% against the Japanese yen and by nearly that amount against the U.S. dollar, as the latest reported drafts of the G20 communiqué show that world leaders meeting in London may decide to triple the IMF's war chest to $750 billion. Reports also indicated that the IMF may issue bonds backed by special drawing rights, a move that could inject more cash into the global economy. Press reports also indicate that countries will refrain from competitive currency devaluations. "If the IMF is allowed to issue SDR-denominated bonds, risky assets will rally substantially in turn providing support to cross yen currency pairs," said strategists at BNP Paribas. Emerging-market equities did rally on Thursday, with the Hang Seng jumping over 6% in Hong Kong and the BUX climbing nearly 4% in Budapest. "Any signs of broad consensus over further spending support to emerging economies (likely via the IMF) and on a market friendly statement suggesting all will be done by G20 leaders to stave off a depression from the ongoing global recession, should also be enough to contain another spike in risk aversion," said currency analysts from Societe Generale. Eyes also will be in Frankfurt as the European Central Bank is expected to cut interest rates, to 1% from 1.5%, in a decision due at 7:45 a.m. Eastern. The ECB sets interest rates in the 16 nations that use the euro as their currency. "The ECB meeting however is an equally pivotal event risk for FX markets," said the SocGen analysts. Ahead of the ECB and the G20 decisions, the euro rose 0.4% to $1.3281. The dollar was up 0.6% to 99.19 yen. The dollar index , which measures the greenback against a basket of currencies, slipped 0.2% to 85.76. Also on the move higher was the British pound, which climbed 0.9% to $1.4580. Sterling was not only helped by the general move in markets to snap up riskier assets, but also data showing a surprise rise in house prices. See house price story. "Risk conditions were again a very important influence and a mood of increased confidence allowed sterling to push above $1.45 on Thursday with the Nationwide reporting a surprise monthly increase in house prices for March," said analysts at Sucden Financial. In the U.S., weekly jobless claims and factory orders data are on tap.

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