7/28/2019 Yen at Almost 100 to Dollar for Second Day; N.Z. Currency Climbs San Francisco Chronicle

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Yen at Almost 100 to Dollar for Second Day; N.Z. Currency

Climbs San Francisco Chronicle

April 11 (Bloomberg) The yen for a second day reached the weakest level in four years, whenit last traded at 100 per dollar, as traders speculated Bank of Japan stimulus measures will keep

driving investors into higher-yielding currencies.

The Japanese currency traded within 0.2 percent of the 100- yen level yesterday and within 0.1

percent today. The dollar slid against most major peers as investors bet that central banks

around the world will maintain stimulus measures. The New Zealand dollar climbed to the

highest level since August 2011, and the euro reached a six-week high against the greenback.

The trend for weaker yen should continue, and in that sense I dont think its surprising that

people are still willing to sell the yen on strength, Brian Daingerfield, a currency strategist atRoyal Bank of Scotland Group Plcs RBS Securities unit in Stamford, Connecticut, said in a

phone interview. Weve been seeing some flow that may be driving the yen weaker.

The yen rose 0.1 percent to 99.68 per dollar at 5 p.m. in New York after gaining 0.7 percent

earlier following data that showed Japanese investors sold foreign bonds last week. The

currency declined as much as 0.2 percent to 99.95, the weakest since April 14, 2009. The dollar

fell 0.2 percent to $1.3099 per euro and reached $1.3138, the weakest since Feb. 28. The 17-

nation common currency rose 0.1 percent to 130.58 yen.

The Dollar Index, which Intercontinental Exchange Inc. uses to track the greenback against thecurrencies of six major U.S. trade partners, touched 82.068, the lowest level since March 15,

before trading at 82.257, down 0.3 percent.

Kiwi Climbs

The New Zealand dollar gained for an eighth day against the greenback, touching 86 U.S. cents

for the first time in 1 1/2 years after reports showed the nations manufacturing expanded last

month and a gauge of home prices advanced. The currency, nicknamed the kiwi, climbed as

much as 1.2 percent to 86.76 cents, the highest since August 2011, before trading at 86.34, up

0.7 percent.

The currency of Canada, another exporter of commodities, reached a seven-week high. The

Canadian dollar gained 0.4 percent to C$1.0105 to the greenback and touched C$1.0084, the

strongest since Feb. 18.

You can see your winners today are ones that normally benefit from central bank

easing, Fabian Eliasson, vice president of corporate foreign-exchange sales at Mizuho Financial

Group Inc. in New York, said in a telephone interview. Are they going more into higher yield?

Yes. Is it because of an overall change in macro perspective? Im not so sure.

Swedens Krona

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Swedens currency strengthened versus the euro and dollar after a report showed consumer

prices were unchanged on an annualized basis in March, above the median of 12 estimates in a

Bloomberg survey. The krona gained 0.4 percent to 8.3223 per euro and climbed 0.7 percent to

6.3539 per dollar.

Colombias peso fell to a one-week low on speculation the government will announce

measures next week that will lead to further declines in the currency. President Juan Manuel

Santos will present a stimulus plan April 15 that includes additional measures to stem gains in

the peso, Finance Minister Mauricio Cardenas said last week. The currency ended the day

down 0.2 percent to 1,823.70 to the dollar after touching 1,827.30.

The yen has lost 13 percent this year versus nine developed-nation counterparts monitored by

Bloomberg Correlation-Weighted Indexes. The euro has gained 0.9 percent, and the dollar has

advanced 1.6 percent.

Japanese investors were net sellers of foreign debt in the week ended April 5, according to data

released by the Ministry of Finance today. They offloaded 1.14 trillion yen ($11.5 billion) in

overseas bonds and notes, purchased 6.3 billion yen in overseas stocks and bought 75.5 billion

yen in overseas short-term securities.

Inflation Goal

Haruhiko Kuroda said yesterday the unprecedented stimulus announced on April 4 after his first

meeting as BOJ governor is enough to achieve a 2 percent inflation goal. The bank is boosting

monthly bond buying to 7.5 trillion yen ($80 billion), suspending a cap on some bond holdingsand dropping a limit on debt maturities.

The central bank has taken all necessary and possible measures, Kuroda told reporters in

Tokyo. While officials will change policy as needed, he doesnt expect adjustments each

month, he said. The BOJ chief reiterated a pledge to do whats needed to meet a 2 percent

inflation target in two years.

Europes shared currency strengthened as Italy sold 4 billion euros of new 2.25 percent 2016

notes at 2.29 percent, down from the 2.48 percent on similar-maturity debt allotted on March 13,

as investors shrugged off risks tied to the nations political crisis.

Cheap Euro

The euro has been cheap versus the dollar, said Michael Sneyd, a currency strategist at BNP

Paribas SA in London. Our analysis shows it has been undervalued, relative to what has been

going on in Italian and Spanish bond markets.

BNP Paribas forecasts the euro will rise to $1.35 within three months, Sneyd said.

The International Monetary Fund said in a report today that global central banks buying assetsand keeping interest rates low to boost growth have had positive short-term effects for banks

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even as risks from the policies are increasing.

Central banks in the U.S., Europe, Japan and the U.K. attacked the longest and deepest

financial slump since the 1930s with unorthodox accommodation.

The Fed spent $2.3 trillion from 2008 to 2011 in two rounds of bond purchases to spur

economic growth. Its now buying $85 billion of debt a month. The Fed has kept its benchmark

interest rate at zero to 0.25 percent since 2008 to support the economy.

Editors: Greg Storey, Kenneth Pringle

To contact the reporter on this story: John Detrixhe in New York at jdetrixhe1@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

Source Article from

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