World Trade Source

28/07/2010

The yen advanced against most of its major counterparts as evidence of a global economic slowdown discouraged demand for higher-yielding assets.

Australia’s dollar slid against the yen and dollar after a report showed the nation’s consumer prices increased in the second quarter less than economists forecast, supporting the case for the central bank to keep interest rates unchanged. The euro erased its gain versus the yen before a U.S. report on durable goods orders as stocks fell.

“The yen strengthened as risk appetite turned around,” said Adam Cole, head of global foreign-exchange strategy at Royal Bank of Canada in London. “The Aussie weakened initially on the soft CPI data.”

The euro was little changed at 114.13 yen at 7:02 a.m. in New York, compared with 114.24 yesterday, after earlier rising 0.4 percent to 114.74, the highest level since May 18. The yen climbed 1 percent to 78.58 per Australian dollar, from 79.33. It gained 0.8 percent to 63.98 against the New Zealand dollar. The yen traded at 87.79 per dollar, compared with 87.90.

The Australian dollar dropped against all of its major counterparts tracked by Bloomberg after the Bureau of Statistics said consumer prices rose 0.6 percent in the second quarter from the previous three months. The median estimate of 21 economists in a Bloomberg News survey was for a gain of 1 percent.

The U.S. economy grew at a 2.5 percent annualized rate in the second quarter after expanding at a 2.7 percent pace in the first three months of the year, according to the median estimate of economists in a separte Bloomberg News survey. The report from the Commerce Department is due July 30. Source -- Bloomberg