Dollar Little Changed Vs Yen


The dollar was little changed against the yen after the Group of Eight stopped short of calling for a stronger U.S. currency in a statement after a summit over the weekend.

The currency earlier slid against the euro as G-8 finance ministers said the world economy faces ``headwinds'' from rising fuel and food costs in a statement on June 14 that didn't mention foreign exchange. The ministers cited further declines in U.S. house prices and stresses in financial markets as other growth risks.

The dollar traded at $1.5382 per euro at 9:46 a.m. in Tokyo from $1.5380 at the end of last week. It earlier fell to $1.5450 per euro. The U.S. currency bought 108.23 yen from 108.19 yen on June 13, when it touched a four-month high of 108.38 yen. The euro was at 166.49 yen from 166.35 yen. The dollar may fall to $1.56 per euro and 106 yen this week, Yamamoto said.

Against the Australian dollar, the U.S. currency was at 93.79 cents from 93.89 cents last week in New York. The dollar traded at 75.01 cents per New Zealand dollar from 74.96 cents. It was at $1.9482 against the British pound from $1.9476.

``The world economy continues to face uncertainty and downside risks persist,'' G-8 officials said in a statement. ``Elevated commodity prices, especially of oil and food, pose a serious challenge.''

The G-8, which comprises the U.S., Japan, Russia, Germany, France, the U.K., Italy and Canada, stuck to their practice of not making a joint comment on currencies when central bankers are absent. Officials from Canada, France and Russia said a higher dollar would help contain oil prices after the meeting in Osaka, Japan.

The price of oil reached an unprecedented $139.12 a barrel on June 6 and food costs from rice to soybeans have risen to record highs this year. Crude oil for July delivery fell 42 cents to $134.44 in after-hours electronic trading on reports Saudi Arabia will increase oil output.

The dollar has fallen against 11 of the 16 most-active currencies this year as oil rose to a record. The U.S. currency's correlation with oil prices against the euro was minus 0.93 for the past year, according to Bloomberg calculations based on value changes. This means the two move in the opposite direction 93 percent of the time.


TradingEconomics.com, Bloomberg
6/15/2008 6:23:59 PM