Dollar Gains as China Says ‘Not Aware’ of Reserve Currency Talk

By Ron Harui

July 2 (Bloomberg) -- The dollar rose against the euro and erased losses versus the yen after a Chinese official said he was “not aware” of a plan to discuss a new reserve currency at a Group of Eight meeting next week.

The dollar climbed to $1.4111 per euro as of 11:41 a.m. in Tokyo from $1.4142 in New York yesterday, when it declined to $1.4201, the lowest since June 5. The U.S. currency was at 96.68 yen from 96.65, after earlier falling to 96.38. The yen advanced to 136.44 per euro from 136.70.

The dollar declined beyond $1.42 versus the euro yesterday after Reuters, citing G-8 sources, reported that China asked to debate proposals for a new global reserve currency at next week’s summit in Italy.

Chinese officials have sought a greater role over time for the International Monetary Fund’s unit of account, known as Special Drawing Rights, or SDRs, in an effort to reduce the dollar’s dominance.

To contact the reporters on this story: Ron Harui in Singapore at rharui@bloomberg.net.

Last Updated: July 1, 2009 22:43 EDT


Rising Stock Markets to Benefit Euro Versus Dollar, Helaba Says

By David Clarke

July 1 (Bloomberg) -- The euro may benefit from rising stocks as the link between equity movements and those of the common European currency get stronger, according to Helaba Landesbank Hessen-Thueringen

“The ups and downs on the equity markets are still closely correlated with movements in the euro-dollar exchange rate,” Ralf Umlauf, head of floor research at Helaba, said in a note today. “The correlation has even increased slightly recently. To this extent, especially in the current phase of economic stabilization, the euro is likely to be supported by the initial reduction of risk aversion.”

The euro climbed 0.3 percent to $1.407 as of 10:19 a.m. in London.

To contact the reporter on this story: David Clarke in Edinburgh at dclarke3@bloomberg.net

Last Updated: July 1, 2009 05:24 EDT