Dollar, yen gain on euro in Asia

Tuesday, June 16, 2009

TOKYO: The dollar and yen rose against the euro in Asia on Tuesday on renewed risk aversion after weak US and European data raised fresh doubts over the pace of global economic recovery, dealers said.

The euro dropped to 1.3769 dollars in Tokyo morning trade from 1.3793 in New York late Monday, and to 133.93 yen from 134.92. The dollar fell to 97.30 yen from 97.83. The greenback and yen gained ground following the release of data from Western economies which raised "doubts over the speed and timing of the global recovery," NAB Capital strategists wrote in a note.

The dollar and yen have been the preferred safe-haven currencies since last year's market meltdown, although the greenback has recently gained more on hopes America will make a quick exit from its recession.

The euro has meanwhile taken a beating due to weak employment data in the eurozone and worries that the region's crisis-hit banks will suffer bigger-than-expected write-downs, dealers said.

"Risk appetite is retreating. Eurozone risks remain high," Societe Generale forex chief Yuji Saito told Dow Jones Newswires.

The European Central Bank "spooked investors with its estimates of credit crisis related write-downs," wrote NAB Capital analysts.

The ECB estimates lenders' potential write-downs related to toxic assets and soured loans to total 649 billion dollars from the 2007-2010 period, much more than the 366 billion dollars forecast previously.

The International Monetary Fund has forecast the full amount could come to 900 billion euros.

The 16-nation eurozone is in the midst of a recession which is the worst for some members since World War II. Employment in the region fell 1.2 percent in the first quarter of 2009 from a year earlier, data released Monday showed.

Investors will keep a close eye on the release later Tuesday of Germany's ZEW business sentiment survey, which measures the confidence of financial market players.

Meanwhile US data for June undermined recent optimism for "green shoots" of recovery in the world's biggest economy.

The NAHB housing index was below market expectations while factory activity in the New York area fell at a faster pace than in May, according to the Federal Reserve Bank of New York's Empire Manufacturing Survey.


(AFP)