The Japanese currency also declined versus the Australian dollar, after yesterday surging the most in three weeks, as a spokesman at the RBA confirmed purchases of its own currency. Japan's Finance Minister Shoichi Nakagawa told lawmakers in Tokyo today that abrupt currency moves are ``undesirable'' and a stronger yen hurts domestic stock investors. He said last month Japan may intervene for the first time in four years.
The yen fell to 95.94 per dollar at 12:10 in London, from 95.01 in New York yesterday. Against the euro it fell to 120.28 from 118.77.
The euro traded at $1.2537, from $1.2505 yesterday in New York, after earlier falling to a two-week low against the dollar following a German government report showing the economy entered its worst recession in at least 12 years. The 15-nation currency also pared gains against the yen.
The yen rose earlier to a two-week high against the euro, after U.S. Treasury Secretary Henry Paulson's plan to divert bailout money from banks sparked cuts in purchases of higher- yielding assets. Paulson said yesterday he plans to use the second half of the $700 billion Troubled Asset Relief Program, known as TARP, to help relieve pressure on consumer credit, scrapping a proposal to buy devalued mortgage assets from banks.
The Australian dollar rose to 63.88 U.S. cents, recovering from an earlier low of 63.60 cents, after an RBA spokesman confirmed the central bank bought its own currency today.
The Australian dollar has tumbled 36 percent versus the Japanese currency and 26 percent against the greenback in the past three months as the risk of a global recession prompted investors to cut purchases of higher-yielding overseas assets funded in Japan. Australia's benchmark rate is 5.25 percent, while Japan's is 0.3 percent and the U.S.'s is 1 percent.
The British pound traded below $1.50 for a second day on evidence Europe's second-biggest economy is withering.
The U.K. currency slumped as recruitment firm Morgan McKinley said job vacancies in London's financial-services industry sank 48 percent in October from a year earlier. The currency declined to $1.4807, the lowest level since June 2002, before trading at $1.4914 from $1.4964 yesterday in New York. It traded at 83.63 pence per euro, near a record low of 84.12 pence reached yesterday.