U.S. Dollar Falls to 4-month Low against Japanese Yen
In London trading today, the U.S. Dollar dropped to a 4-month low against the Japanese Yen, but gained against high-yielders because investors moved in to safe-haven assets after the collapse of the U.S. investment giant, Lehman Brothers.
Concerns about the U.S. financial sector, following the bankruptcy filling of Lehman Brothers arose as investors believe that it would still claim other victims. As a result, investors moved into safer assets, thus boosting government bonds and sending stocks lower and creating a situation whereby banks are not willing to lend to each other.
According to analysts, the bad new coming from the United States financial sector is actually helping the U.S. Dollar as investors are moving their assets back into the greenback. For this reason, it is expected that the U.S. currency will remain well supported.
Today’s trading was choppy ahead of the news from the Fed’s meeting at 18:15 GMT today regarding interest rates. The money market was illiquid as the interbank overnight dollar funds borrowing cost jumped to above 10%.
At 10:49 GMT, the U.S. Dollar fell by 0.4% to 104.07 Yen, while the Euro also fell by 1.05% to 147.69 Yen. The Euro fell by 0.5% to $1.4187, lower than session peak of $1.4479 that occurred on Monday.