Australia interest rates on hold; yen weaker

Story link: Australia interest rates on hold; yen weaker

The yen weakened Tuesday as demand increased for higher-yielding currencies after the Reserve Bank of Australia unexpectedly left interest rates there at 3.25 percent and on gains in European and US equities markets, although he Aussie gave back some of its gains against the yen and the US dollar after Wall Street turned lower.

Japan’s currency was hurt by reports that carmaker Toyota (TYO: 7302; NYSE: TM; LSE: TYT) will report its first loss in almost 60 years and could ask for $2 billion in loans from the government.

The Aussie was helped, meanwhile, by a narrower current-account deficit in the fourth quarter, by a gain of 0.2 percent in retail sales in January over December, and ahead of a report that is expected to show that Australia’s economy expanded by 0.2 percent in the fourth quarter.

In late morning trade in New York, the Australian dollar was worth 63.83 cents US while the yen traded at ¥62.7465 to the Aussie.

Unlike the Australian currency, the New Zealand dollar held on to its gains as it was worth 49.58 cents US and ¥48.758.

The US dollar and the euro were both higher against the yen, with the yen trading at ¥123.2201 to the euro and at ¥98.305 to the greenback.

The pound saw declines against the euro on sentiment that the Bank of England will cut UK interest rates to 0.5 percent at Thursday’s meeting of the Bank’s Monetary Policy Committee.

At nearly 11:30 a.m. in New York, the pound traded at 89.43p to the euro while it took $1.4015 to buy a pound.