Lehman bankruptcy helps yen

Story link: Lehman bankruptcy helps yen

Moves in currencies markets were driven Monday by the bankruptcy of Lehman Brothers (NYSE: LEH), with the yen and Swiss franc benefiting as investors pulled out of risky currency investments financed with the low-yielding currencies.

Also helping the yen was more trouble for US insurer American International Group (NYSE: AIG), which unsuccessfully sought more capital in order to avoid credit downgrades.

The US dollar declined as expectations rose that the Federal Reserve will cut interest rates again at its next meeting, but was up slightly in relation to the euro after Bank of America (NYSE: BAC; TYO: 8648) agreed to take over Merrill Lynch (NYSE: MER; TYO: 8675).

In mid-morning trade in New York, the yen was at ¥105.8850 to the greenback while it traded at ¥150.2190 to the euro, at ¥85.5338 to the Australian dollar and at ¥69.925 to the New Zealand currency.

Meanwhile, the Swiss franc gained to SFr1.1214 to the US dollar and to SFr1.5909 to the euro.

The Canadian dollar dropped in relation to the yen and the greenback, but it gained on currencies from other commodities exporters, such as the Norwegian krone.

At mid-morning in New York, the loonie traded at C$1.0727 to its US counterpart and was at ¥98.7043 to the yen.

The Norwegian krone was down to kr5.4152 to the Canadian dollar and traded down at kr8.1970 to the euro, but it had gained to kr5.7272 to the US dollar.