Yen, Swiss franc gain on economy concerns

Story link: Yen, Swiss franc gain on economy concerns

The yen and Swiss franc both made gains on Tuesday while the Australia and New Zealand dollars declined on the session.

Both the Japanese and Swiss currencies were up on declines in equities markets and on concerns that demand for high-yielding currencies such as the Australia and New Zealand dollars is dropping as economic growth slows globally.

In mid-morning trade in New York, the yen was at ¥105.8450 to the US dollar while it traded at ¥166.8645 to the euro and at ¥13.394 to the South African rand, while the Swiss franc was at SFr1.0896 to the greenback and at SFr1.6074 to the euro.

The Australian dollar dropped against both the US dollar and the yen after the Reserve Bank of Australia warned that continuing high interest rates and gains in the price of gasoline will mean that consumers will have to cut spending.

The RBA left interest rates unchanged at 7.25 percent amid predictions that rates will not increase soon and that when they do go up, it will not be by as much as earlier thought.

In morning trade in New York the Aussie traded at 95.34 cents US and at ¥100.9179.

Meanwhile, the New Zealand dollar weakened amid expectations that the Reserve Bank of New Zealand will cut interest rates soon, possibly by September, and that they will fall more in the next year than previously anticipated.

The kiwi traded at 75.75 cents US in mid-morning trade in New York while it took ¥80.217 to buy a New Zealand dollar.

The greenback was nearly unchanged versus the euro, trading at $1.5765 to the shared currency, on a new report from the US Institute for Supply Management that put its factory index at 50.2 in June, indicating a slight expansion in manufacturing activity during the month against predictions that activity would continue to contract.

The pound rose to above $2, trading at $2.0003 briefly before falling back to $1.9998 in late morning trade in London and then trading at $1.9935 at mid-morning in New York, while the UK currency was also up in relation to the euro but later gave back some of the gains to trade at 79.08 in New York.