Yen gains on euro, USD, pound

Story link: Yen gains on euro, USD, pound

The yen strengthened versus the euro, the US dollar, the pound and the Australian dollar Tuesday as investors backed away from purchases of higher-yield currencies financed with the low-yielding yen, but the US dollar gained on the euro, the pound and the South African rand after wholesale prices in the US were reported to be up twice as much as expected in July.

The 1.2 percent gain in wholesale prices in the US were read as an indication that the US interest rate should be higher than it is currently.

In late morning trade in New York the yen traded at ¥161.6358 to the euro, at ¥109.7100 to the greenback, at ¥204.6378 to the pound and at ¥95.3051 to the Australian dollar.

At the same time, the US dollar traded at $1.4733 to the euro.

The pound weakened in relation to the euro and the US dollar after an official of the Bank of England said that UK inflation will be down next year, adding to the possibility that interest rates there will fall.

The UK currency traded at 78.99p to the euro at late morning in New York, while it took $1.8653 to buy a pound.

There were also declines for the South African rand after gold and platinum prices dropped, with the currency declining even though a government report said that the South African economy expanded at an annual rate of 4.9 percent in the second quarter, mostly on mining and manufacturing.

By late morning in New York the rand traded at R7.8125 to the US dollar and at R11.507 to the euro.