| FOREX-Yen soars as market reins in short positions
LONDON, Feb 5 (Reuters) - The yen hit a 1-1/2 week high against the euro and rose versus the dollar on Monday as investors scaled back bets against the Japanese currency before a weekend meeting of Group of Seven financial chiefs. The dollar ticked up against the euro ahead of a key survey on the health of the U.S. service sector at 1500 GMT which is expected to give further confirmation that the world's biggest economy will manage to avoid a sharp slowdown. Further ahead, investors are looking to the G7 meeting in Essen, Germany on Feb 9-10 as European officials have been pushing for discussion of the yen's weakness, although their Japanese and U.S. counterparts have played down the issue. Although many doubt the G7 would take any concerted action against the cheap yen, nervousness in the run up to the meeting was enough to prompt them to cover their short positions, which reached a record level last week.
Australian Dollar Heads for Biggest Weekly Rise in Two Months
Feb. 9 (Bloomberg) -- Australia's dollar headed for the biggest weekly gain in two months as it tracked a rise in the price of commodities the nation exports, such as gold. The currency rose a sixth day after the Reuters/Jefferies CRB index of 19 commodities jumped 1.5 percent to a month-high. Raw material exports add about 14 percent to economic growth. Australia's dollar rose above 78 U.S. cents yesterday for the first time in two weeks after the jobless rate fell to a 31-year low. ``The Australian dollar continues to grind higher, extending yesterday's post-data gains,'' said Danica Hampton, a currency strategist at Bank of New Zealand in Wellington. ``The gain in base and industrial metals is providing some support.'' The currency bought 78.12 U.S.
Sterling Draws Renewed Support From Manufacturing Data
LONDON -(Dow Jones)- Sterling has recovered some of the losses it made earlier this week after strong U.K. manufacturing data provided a boost. The currency has swung around 40 points higher against the dollar, reaching $1.9670 by 1230 GMT, and the euro-sterling rate has dropped by around 20 points to GBP0.6613. This modest climb helped the pound to recover from the market's general concerns about currencies linked to high interest rates - a theme which preoccupied some traders Wednesday. In trading against the euro, purchasing managers index data were particularly supportive. U.K. PMI data for January showed the first rise since September, while similar euro-zone data hit an 11-month low. "The divergence in the growth data suggests that we could see the U.K.-euro area rate spread start to widen again," said currency strategists at JP Morgan in a note to cloents.
Ringgit soars to 9-year high against greenback
KUALA LUMPUR: The ringgit jumped to a nine-year high of 3.4960 against the US dollar yesterday on the back of strong foreign fund flows into the stock market and on friendly comments from the central bank.
Its climb above the RM3.50 mark against the dollar surprised traders, many of whom had anticipated that Bank Negara might intervene to prevent the ringgit from strengthening further in case it affected Malaysias export competitiveness. Central bank governor Tan Sri Dr Zeti Akhtar Aziz said the stronger currency was not hurting exporters. "What is important in the foreign exchange market is that we dont see sudden and disruptive changes in our currency," she told a media briefing in Kuala Lumpur yesterday. The ringgit has been one of the best performers among the 15 Asian currencies so far this year.
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