Bank bailouts hurt euro

The euro was hurt Monday by the spreading credit crisis, weakening on bailouts of European banks, even as the Japanese yen strengthened on a general retreat from risky carry trades, in which investors finance purchases of higher-yielding currencies with the low-yielding yen.

In late morning trade in New York, the euro was worth ¥137.0184 while the US dollar traded at $1.3516 to the shared currency, the pound gained on the euro to 77.8p to the euro and the shared currency declined in relation to the Swiss franc, to SFr1.5482.

In Germany, a group including the German government and private banks and insurers mounted a rescue of Hypo Real Estate Holdings (FWB: HRX) while BNP Paribas (Euronext: BNP; TYO: 8665) stepped in to take over Belgian units of Fortis (EuronextAMS: FORA; EuronextBRU: FORB; LuxSE: FOR) after a government rescue did not work out.

The yen also gained on other currencies, with the yen trading at ¥101.375 to the dollar while it was up to ¥72.7011 to the Australian dollar and to ¥46.938 to the Brazilian real.

The real was down to its lowest level in nearly two years, trading at R$2.162 to the US dollar.

The Canadian dollar, meanwhile, was down on falling oil prices and a decline of 13.5 percent in the number of building permits issued in August, against an expected decline of just 1.5 percent, with the loonie trading at C$1.1028 to the US dollar.

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