USD, yen stronger on more recession concerns

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The Japanese yen and the US dollar were stronger in early trade in New York Thursday as equities markets declined on worries that US plans to overcome the recession will not be sufficient.

The dollar was helped by a report from the Commerce Department showing that retail sales were up 1 percent in the United States in January.

Meanwhile, the euro was hurt by new data showing that industrial production was down by 12 percent in the Eurozone in December, much more than the 9.5 percent decline which was anticipated, and by a cut in the European Central Bank’s outlooks for inflation and growth in 2010.

The economic news led to the possibility of more interest rate cuts from the ECB soon.

The pound fell after the UK’s Council of Mortgage Lenders reported that loans granted for home purchases were down 49 percent to just 516,000 in 2008.

In morning trade in New York, the yen traded at ¥115.6118 to the euro, at ¥90.605 to the greenback, and at ¥128.8101 to the pound.

At the same time, the pound traded at 89.75 to the shared currency while the US dollar traded at $1.276 to the euro and at $1.4217 to the pound.