Yen weakens on US spending data

Story link: Yen weakens on US spending data

The Japanese yen weakened against all sixteen major currencies on Friday after the US Commerce Department released new data showing that personal spending was up 1.1 percent in the US in November, much higher than spending in October, easing worries that the US economy will weaken significantly.

The new information as well as a rally among global equities markets made investors more willing to enter risky carry trades, selling the yen to buy higher-yielding currencies.

In early afternoon trade in New York, the yen traded at ¥114.1050 to the US dollar, at ¥163.7804 to the euro, and at ¥226.1731 to the pound.

The yen lost at least 1 percent against the Australian dollar to trade at ¥98.7122, against the Canadian dollar at ¥115.0310, against the New Zealand dollar at ¥87.087, against the Brazilian real at ¥63.762, and against the South African rand at ¥16.280.

The pound was also weaker on Friday as investors worried that lower house prices spurred by tighter lending and inflation that has been slowing could cause the Bank of England to cut interest rates again soon.

The UK currency fell to an all-time low versus the euro at 72.56p to the euro and traded at 72.41p to the euro at early afternoon in New York, having dropped 10 percent against the shared currency since the end of January.

The biggest loss for the pound this year has been against the Brazilian real at 15 percent; the pound traded at 28.14p to the real in New York today, while it traded at 50.45p to the US dollar.