Carry trades hurt yen, help Aussie and kiwi

The yen was weaker Friday on a return to popularity of higher-yielding currencies as the possibility of a sale of Lehman Brothers (NYSE: LEH) was rumored.

At late morning trade in New York, the yen traded at ¥152.941 to the euro, at ¥107.7050 to the US dollar, at ¥193.018 to the pound, and at ¥16.047 to the Swedish krona.

The return to carry trades helped the Australia and New Zealand dollars, however, with the Aussie also helped as gains in employment numbers there cut expectations of an interest rate cut there next month.

The Australian dollar was worth 81.77 cents US and ¥88.0703, while it took 66.47 cents US to buy a New Zealand dollar and the kiwi was worth ¥71.56.

The US dollar weakened as US retail sales dropped by 0.3 percent in August, producer prices declined 0.9 percent at the same time, and on speculation that the Federal Reserve could cut US interest rates again this year.

The greenback traded at $1.42 to the euro in late morning trade in New York.

The euro was helped after the finance minister of Luxembourg and the vice president of the European Central Bank both downplayed the possibility of a recession in the Eurzone in separate comments.

Story link: Carry trades hurt yen, help Aussie and kiwi