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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: ggersh who wrote (26128)	1/7/2010 5:35:33 PM
From: RockyBalboa	Read Replies (2) \| Respond to of 71442

FOREX-Yen hits four-month low vs dollar on Kan comments * Yen suffers broadly after Kan comments on weaker currency * Dollar gains; market awaits U.S. jobless figures on Friday * Aussie rallies after strong Australian sales data (Adds comment, updates prices) By Jessica Mortimer LONDON, Jan 7 (Reuters) - The yen hit a four-month low against the dollar on Thursday after Japan's new finance minister said he wanted it to weaken more. The U.S. dollar's rally against the yen helped boost the U.S. currency across the board, but gains were capped as traders braced for U.S. payrolls data due on Friday, which was seen providing stronger direction for currencies in the new year. Speaking after his appointment as finance minister, Naoto Kan said many Japanese firms were in favour of dollar/yen around 95 yen, higher than the pair traded in late 2009. [ID:nTOE60607E] He added he would work with the Bank of Japan to bring the yen to an appropriate level, sparking broad yen selling. "The comments were very aggressive and the yen sell-off is appropriate," said Paul Mackel, director of currency strategy at HSBC in London. "The new comments put further fuel in the fire to push the yen lower and the trend in yen weakness is going to continue." Kan replaced Hirohisa Fujii, who was seen as more tolerant of a stronger yen. The yen fell nearly 1 percent to a low of 93.27 per dollar, according to Reuters data, its strongest since September and approaching its 200-day moving average around 93.50 yen. Broad dollar strength saw it rise 0.6 percent against a basket of currencies, to 77.956 <.DXY>, by 1257 GMT. "The dollar looks undervalued against a lot of currencies. That's lending some support to the dollar on a broad basis," said Standard Chartered strategist Manik Narain. The euro fell 0.6 percent to a low for the day of $1.4316 according to Reuters data. The single currency was hurt by weak German manufacturing orders and euro zone retail sales data, which were partially offset by a bigger-than-expected rise in euro zone economic sentiment. [ID:nLDE606113] [ID:nLDE6060OX] [ID:nLDE6060Z8] The euro hit its weakest against the Swiss franc in nearly 10 months around 1.4767 francs, before recovering to 1.4830. The franc was knocked by weak inflation data [ID:nLDE6060K4] while traders were jittery about the possibility the Swiss central bank may step in to curb strength in the currency. PAYROLLS EYED; AUSSIE RALLIES Dollar gains were limited as traders awaited Friday's payrolls report for December, which could help shape the outlook for when the U.S. Federal Reserve raises interest rates. The report is expected to show the economy shed 8,000 jobs in December, after a surprisingly small 11,000 drop in November, a Reuters poll showed. [ID:nN04238910] Before that, traders will be watching for U.S. weekly jobless claims data at 1330 GMT on Thursday. The U.S. currency recovered after losing ground against the euro on Wednesday when U.S. Federal Reserve minutes suggested more economic stimulus measures were possible. [ID:nN06157786] The Australian dollar rallied broadly, climbing to its strongest against the yen since September 2008 after surprisingly strong retail sales data bolstered the case for another interest rate rise next month. [ID:nSGE60600S] The figures pushed the Australian currency to a two-year high of 0.6415 euros and extended its gains against sterling to A$1.7312, its highest since 1985. It rose as high as $0.9268 against the U.S. dollar , its firmest since early December. By 1230 GMT, broad dollar strength pushed it down 0.4 percent at $0.9169. (Additional reporting by Sujata Rao, editing by Nigel Stephenson) ((naomi.tajitsu@reuters.com; +44 207 542 5830; Reuters Messaging: naomi.tajitsu.reuters.com@reuters.net)) Currency bid prices at 1300 GMT. All data taken from Reuters with percent change calculated from the daily U.S. close at 2130 GMT.