MW:Dollar, yen rally on raging Greece, Spain fears
Euro drops to lowest level against the yen in this millennium
By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — The U.S. dollar strengthened against most major currencies, other than the Japanese yen, as fears flared about a potential default by Greece as well as Spain’s fiscal health.
The euro EURUSD -0.15% dropped to $1.2114 in Tokyo afternoon trade, down from $1.2161 in North America late Friday.
The currency had dropped as low as $1.2104 earlier in the day, a level last seen in June 2010 on a day-end basis, according to FactSet data.
Against the Japanese currency, the euro EURJPY -0.65% was fetching ¥94.74, after falling as low as ¥94.60, a level that hadn’t been seen in this millennium. Late Friday, the European currency bought ¥96.42.
The common currency’s losses, which follow Friday’s weak performance, came in the wake of a news report that the International Monetary Fund was set to stop aid for Greece, a decision that could potentially push the debt-stricken European nation into bankruptcy. Read full story on reported IMF Greek aid suspension.
At the same time, fears about Spain raged on, amid reports that the Valencia and Murcia regions could ask for Madrid’s assistance. Read more about aid requests from Valencia and Murcia.
“There has been little in the way of positive press since Friday, and as such, markets have started the week as they finished the last — with a decided air of risk aversion,” said Sue Trinh, senior currency strategist at RBC Capital Markets.
The ICE dollar index DXY +0.25% , which measures the greenback against a basket of six other major currencies, climbed to 83.689 from 83.457 late in North American trade Friday.
The WSJ dollar index XX:BUXX +0.25% , a new benchmark tracking the U.S. unit’s moves against some of the world’s most heavily traded currencies, rose to 72.52 from 72.33 on Friday.
The British pound GBPUSD -0.36% fell to $1.5576 from $1.5619, and the Australian dollar AUDUSD -0.45% lost ground to trade at $1.0315, down from $1.0382.
Against the Japanese currency, however, the dollar USDJPY -0.49% fell to ÂĄ78.19 from ÂĄ78.47. The yen, like the dollar, is widely considered a safe-haven where investors seek refuge during periods of financial stress.
The yen held its gains against the dollar and the euro, as well as many other currencies, despite a warning from Japan’s Finance Minister Jun Azumi that Tokyo would take “decisive steps against speculative movement of excessive volatility.” Read full story on Japan finance minister’s comments.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
