U.S. Dollar and Japanese Yen Gain as Shares Fall
The U.S. Dollar and Japanese Yen rose today as investors felt comfortable with the perceived safety of both currencies as stocks fell, prompted by concerns about the effectiveness of government policies to curb recession and rescue the ailing banks.
Following a drop in the Asian stock market, European shares fell in early trading as investors were disappointed about the lack of details about the U.S. government rescue plan. Even though the U.S Congress agreed to the stimulus package, investors remained wary. According to Christian Lawrence of RBC capital Markets, the markets are “vaguely risk adverse."
The dollar index, a measure of the strength of the U.S. Dollar against a group of currencies, rose by 0.2% to 86.087. By 08:45 GMT, the U.S. Dollar fell by 0.5% against the Japanese Yen and traded at 89.99 Yen, while the Euro also fell by 1.1% and traded at 115.27 Yen. Against the U.S. Dollar, the Euro fell by 0.4% and traded at $1.2841.
The Pound Sterling hit 1-week low against the U.S. Dollar and the Euro. The Euro fell by 1.3% against the U.S. Dollar and traded at $1.4186, while it rose by 0.9% against the Pound Sterling.