Yen Falls Versus Euro, Dollar

The yen weakened against the euro and the dollar as a record plunge in Japan’s exports last month signaled the world’s second-largest economy was falling deeper into a recession., 12/22/2008 11:54:11 AM

The ruble slid to the lowest level against the dollar in almost three years as Russia devalued the currency and tumbling oil prices this year battered its economy. The dollar weakened against the euro before reports this week forecast to show U.S. consumer spending and durable goods orders declined.

The yen dropped 1.1 percent to 125.66 per euro at 2:35 p.m. in New York, from 124.22 on Dec. 19, paring its gain this year to 30 percent. The yen depreciated 0.9 percent to 90.08 per dollar from 89.31. Japan’s currency may decline to 97.5 by the end of 2009, according to Serebriakov. The yen reached the 13- year high of 87.14 on Dec. 17. The dollar weakened 0.3 percent to $1.3950 per euro from $1.3912. It slid to $1.4719 on Dec. 18, the weakest level since Sept. 25.

The ruble weakened as much as 1 percent to 28.4651 versus the dollar, the lowest level since January 2006, as Bank Rossii allowed the currency to decline for the second time in three working days and the ninth time since Nov. 11, according to a central bank official who declined to be identified. The currency has slid 17 percent against the dollar since the beginning of August.

China’s yuan fell for a second day versus the dollar on speculation China is keeping appreciation in check to help exporters cope with the global recession. The yuan dropped 0.1 percent to 6.8510 per dollar, according to the China Foreign Exchange Trade System. China cut interest rates today for the fifth time in three months as trade growth collapsed.

Japan’s currency appreciated 24 percent against the dollar this year, its biggest annual gain since at least 1972, as more than $1 trillion of credit-market losses sparked a seizure in money markets and threw the U.S. economy into a recession.

A stronger yen contributed to a 27 percent drop in Japan’s exports in November from a year earlier, a Japanese government report showed today. The decline was the biggest since comparable data became available in 1980.

The dollar fell today for the first time in three days against the euro before U.S. reports that economists expect will show spending by consumers fell in November for a record fifth month, while home sales and orders for durable goods also declined as the recession deepened.

The U.S. currency declined last week to the weakest level versus the euro in almost three months after the Federal Reserve lowered its target rate to a range of zero to 0.25 percent.

For the year, the dollar gained 4.5 percent against the euro, 34 percent versus the British pound and 28 percent against the Australian dollar as investors bought the greenback to flee riskier assets and repay dollar-denominated loans from lenders reining in credit.