April 7 (Bloomberg) -- The yen fell against currencies including South Korea’s won and the Canadian dollar as signs of economic recovery in the Asia-Pacific region boosted demand for higher-yielding assets.
Australia’s dollar traded near its strongest since at least 1999 versus the euro as higher commodity prices boosted the value of its exports and before a report forecast to show the nation added jobs for a seventh month. Malaysia’s ringgit rose to the strongest in 23 months versus the greenback, leading gains in Asian currencies, as the World Bank said East Asian economies may experience “rapid growth” in coming years.
“Risk sentiment is firm, which means the downward trend in the yen may persist,” said Akane Vallery Uchida, a currency strategist at Royal Bank of Scotland Group Plc in Tokyo. “Cross-yen currencies such as Aussie-yen are likely to be supported by underlying demand for commodities and by interest- rate differentials.”
The yen fell to 87.15 per Australian dollar as of 7:16 a.m. in London and touched 87.52, the weakest since September 2008, from 87.07 yesterday in New York. It ended two days of gains versus the dollar, falling 0.3 percent to 94.05. Japan’s currency declined to 125.78 per euro from 125.67. It slid by 0.5 percent against both Canada’s and South Korea’s currencies.
Australia’s dollar climbed as high as 69.40 euro cents, the most since the common currency’s introduction, and traded at 69.27, from 69.28 yesterday. The price of gold, Australia’s third-most valuable commodity export, rose 0.3 percent to $1,137.15 an ounce and crude oil traded near an 18-month high.
The Malaysian ringgit gained for a sixth day, rising to 3.1975 per dollar. It touched 3.1921, the highest since May 2008, as Prime Minister Najib Razak said this year’s growth can exceed current forecasts.
Asia-Pacific Growth
A report by Australia’s statistics bureau will show employers added 20,000 jobs in March, according to economists surveyed by Bloomberg. Reserve Bank of Australia Governor Glenn Stevens yesterday increased the nation’s benchmark rate to 4.25 percent and said rates need to be “closer to average” amid an expanding domestic economy and growth in Asia.
The Bloomberg-JPMorgan Asia Dollar Index, a gauge of the region’s 10 most-used currencies excluding the yen, traded near its highest since August 2008. Emerging East Asia, which excludes Japan and the Indian subcontinent, will expand 7.6 percent this year, more than a November estimate of 6.4 percent, the World Bank said in its semi-annual report today.
Bank of Japan
The yen maintained losses after the Bank of Japan today left its benchmark overnight lending rate at 0.1 percent and kept its assessment of the world’s second-largest economy unchanged. The interest-rate decision was expected by all 21 economists surveyed by Bloomberg News.
The Nikkei 225 Stock Average rose 0.2 percent and the MSCI Asia-Pacific Index of regional shares climbed 0.6 percent, spurring demand for riskier investments.
The U.S. dollar fell toward its lowest level against Canada’s dollar since July 2008 as Federal Reserve Chairman Ben S. Bernanke may today signal the central bank will keep interest rates near zero to support growth.
Fed Officials
Fed officials saw signs the recovery could be hobbled by high unemployment and tight credit, and some warned of increasing borrowing costs too soon, according to minutes of their March meeting released yesterday. Bernanke will speak in Dallas, Texas today on the topic of economic challenges.
“It looks like the Fed will be on hold for the entire year,” said Yuji Saito, director of the foreign-exchange department at Credit Agricole Corporate and Investment Bank in Tokyo. “This is a dollar-negative.”
Interest-rate futures contracts on the Chicago Board of Trade show a 31 percent chance U.S. policy makers will leave the target lending rate unchanged in a range of zero to 0.25 percent by their November meeting, up from 25 percent odds a day earlier.
The greenback declined 0.2 percent to C$0.9995 from C$1.0016 in New York yesterday, when it reached C$0.9988.
The euro traded near its lowest in more than a week versus the dollar on concern a recovery in the 16-nation region will be hampered by discord over Greece’s rescue package.
Greece Concerns
Factory-gate prices in the euro region fell 0.4 percent in February from a year earlier, while German factory orders declined 0.5 percent from January, according to median economist estimates before the data are released today. A media report yesterday said Greece wants to bypass International Monetary Fund conditions for possible aid, which the nation’s finance minister denied.
Greece received information from the IMF about “tough” conditions the organization would impose in return for aid, and officials are concerned that they might cause civil unrest, Market News International reported. It cited senior government people in Athens it didn’t identify.
“We certainly see some downside risks to the euro as they don’t seem to have a final, credible solution to Greece’s fiscal problems,” said Joseph Capurso, a currency strategist in Sydney at Commonwealth Bank of Australia. “The worse that these Greek concerns get, eventually there will be cuts to global growth forecasts.”
To contact the reporters on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net; Ron Harui in Singapore at rharui@bloomberg.net.
Last Updated: April 7, 2010 02:19 EDT
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