Yen near two-year high versus USD

Yen near two-year high versus USD

Story link: Yen near two-year high versus USD

TAGS:

The yen held near a two-year peak in relation to the US dollar on more news of writedowns in consequence of defaults on subprime mortgages, this time up to $12 billion in losses for HSBC (NYSE: HBC; LSE: HSBA; Euronext: HSBC; SEHK: 005) according to Goldman Sachs.

At just before 2 p.m. in New York the yen was trading at ¥108.1750 to the dollar after being as strong as ¥107.55 last Friday, its best rate versus the dollar since mid-2005.

At the same time, the yen was at ¥160.7317 to the euro, at ¥223.7924 to the pound and at ¥94.8153 to the Australian dollar.

Meanwhile, sterling gained on the US dollar as speculation increased that the Federal Reserve will cut US interest rates again before the end of the year while the Bank of England is widely expected to keep rates on hold at least for the time being.

In afternoon trade in New York a pound was worth $2.0688, while it took €1.3923 to buy a pound.

According to a report from Bloomberg, the declining US currency is more and more being favored as a way to finance carry trades, in which lower-yielding currencies are used to buy currencies with higher yields, ahead the yen and the Swiss franc which are traditionally among the favorite currencies for funding such risky investments.