Yen stronger on exit from risk

The Japanese yen strengthened versus the US currency as well as in relation to the euro, the pound, and the Australia and New Zealand dollars on Thursday after investors exited risky carry trades on fears that a plan by several central banks to inject liquidity in to the banking system will not be enough to solve the credit crisis.

The yen traded at ¥112.0850 to the US dollar, at ¥163.7169 to the euro, at ¥228.5639 to the pound, and at ¥98.0632 to the Australian dollar.

A new report showing that US retail sales were up 1.2 percent in November helped the dollar to gain on the euro, the pound and the Swiss franc.

In early-afternoon trade in New York, the greenback was trading at $1.4606 to the euro and at $2.0392 to the pound, while it took SFr1,1420 to buy a dollar.

The pound was hurt by a new report that the slowdown in the UK housing market is getting worse, making it more likely that the Bank of England will have to cut interest rates again.

The Swiss franc, meanwhile, fell against the majority of major currencies after the central bank there held interest rates at 2.75 percent which left the Swiss currency trading at SFr1.6680 to the euro and at SFr2.3287 to the pound in afternoon trade in New York.

Story link: Yen stronger on exit from risk