Tuesday, 26 Oct 2010

Yen Drops on Renewed Intervention Speculation

The Yen declined from its 15 year high versus the USD amid renewed concerns the Japanese government will intervene to weaken the currency. Warnings about the strength of the yen made by Japanese officials earlier today helped push the dollar higher Tuesday.

The yen weakened to 81.36 against the dollar, from 80.81 yen yesterday, when it reached 80.41 yen, the strongest since April 1995. The euro bought 113.14 yen from 112.85 yen. The dollar recovered versus the euro to $1.3896 from $1.3965.

The pound rose following better-than-expected U.K. growth data. Third quarter GDP grew at 0.8%, twice the expectations of a 0.4% rise. The pound rose 1% to $1.5884 and appreciated 1.2% to 87.84 pence per euro. The better than expected grow numbers reduce pressure on the Bank of England to expand monetary easing.