Dollar Rallies vs Yen


The dollar rose against the yen on Tuesday after Warren Buffett told CNBC television that Berkshire Hathaway had offered to assume the liabilities of the monoline bond insurers.

Stock futures rose on the news, and that helped boost risk appetite across markets and lift the dollar against the yen and Swiss franc. Low-yielding currencies tend to rise with risk aversion but suffer when investor outlook improves.

The dollar rose to 107.47 yen on the news from around 107.10 earlier. It was up 0.5 percent from late Monday. The euro also rose 0.5 percent to 156.12 yen but was little changed against the dollar at $1.4527.

Buffett told CNBC his plan would cover $800 billion in municipal bonds and said one bond insurer has rejected his offer.

Bond insurers guarantee over $2.4 trillion of debt and have been struggling to hold onto their top credit ratings because they've suffered losses from backing mortgage securities that have plunged in value.


TradingEconomics.com, Reuters
2/12/2008 6:29:37 AM