U.S. Dollar Falls Slightly, Aided by Allure of Safe Haven

Today, February 19, 2009 at 2:56 pm (JST) in Tokyo, the U.S. Dollar dipped after hitting a 6-week high versus the Japanese Yen and a 3-month high against the Euro, but it remained firm as U.S. government’s efforts to address the housing crisis supported its safe haven appeal.

Meanwhile, the Japanese Yen is continuing to come under pressure due to concerns about its economy, which suffered its sharpest contraction in 30 years during the last quarter of 2008 and political uncertainty because voter support for Taro Aso, Prime Minister, is falling.

Today, the Bank of Japan kept its key interest rate unchanged at 0.10%, as expected, but the bank extended the deadline for acquiring commercial paper in order to assist corporate funding in light of the credit crisis, with the economy facing its worst contraction in more than 30 years.

The U.S Dollar fell by 0.4% from late trading in New York yesterday to 93.45 Yen; however, it remained within reach of yesterday’s high trade of 93.96 Yen.  The Euro rose slightly (by 0.1%) versus the Yen, trading at 117.60 Yen; it climbed by 0.4% to $1.2585 against the U.S. Dollar.