Yen, Swiss franc gain on risk aversion

Yen, Swiss franc gain on risk aversion

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The yen strengthened Friday on declines in demand for carry trades as equities markets declined on new worries about losses related to the credit crisis.

At around 11:30 a.m. in New York the yen traded at ¥159.2379 to the euro and at ¥103.0900 to the US dollar.

Investor reluctance to enter into risky trades for high-yielding currencies also helped the Swiss franc, which was trading at SFr1.0438 to the US dollar and at SFr1.6124 to the euro at late morning in New York.

The South African rand weakened versus most major currencies as oil prices continued to rise, on declining demand for high-yielding currencies, and on shrinking gold and foreign currency reserves.

South Africa’s gross reserves were reported down to $34.3 billion in April.

The rand lost the most to the yen and the Swiss franc, as it took ¥13.392 to buy a rand and a Swiss franc cost R7.3767, but the South African currency was also down at R7.7015 to the US dollar and $11.894 to the euro.

The dollar declined in relation to the euro, which traded at $1.5446 to the shared currency, as the euro was helped by speculation that Eurozone interest rates will remain at 4 percent for the foreseeable future although the dollar recovered some losses after the US Commerce Department reported that the US trade deficit declined more than had been anticipated in March as imports dropped.

The pound was weaker in relation to the greenback as the UK government reported that the first quarter saw more home repossessions since the early 1990s, which improved the likelihood that the Bank of England will cut interest rates soon.

In late morning trade in New York it took $1.9480 to buy a pound while the British currency traded at 79.30p to the euro.