New US plan weakens USD, yen

The yen and the US dollar were weaker Monday as a new initiative by the US Treasury department to buy troubled assets, the Public-Private Investment Program, made it look as if there will be more willingness by investors to make risky investments.

The public part of the plan will be financed with money from the Troubled Asset Relief Program (TARP).

Meanwhile, the euro was helped by indications in remarks from European Central Bank President Jean-Claude Trichet that Eurozone interest rates will not fall to zero.

In late morning trade in New York, the yen traded at ¥131.6883 to the euro while it was down to ¥97.265 to the US dollar, and the dollar traded at $1.3539 to the euro.

News of the new US initiative sent the Australian and New Zealand dollars higher in relation to the greenback as the Aussie was worth 69.81 cents US while the kiwi was at 56.89 cents US.

The pound hit a one-month high versus the dollar and was worth $1.4468 at around 11:30 a.m. in New York while the pound traded at 93.58p to the euro at the same time after UK equities markets, and especially UK banks, saw gains on the session.

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