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Tuesday, 8 October 2013
Yen Falls From Eight-Week High as Safety Demand Wanes; Won Drops
By Lukanyo Mnyanda & Masaki Kondo - Oct 8, 2013 12:32 PM GMT+0400
The yen and Swiss franc weakened as gains in Asian stocks damped demand for safer assets amid speculation U.S. politicians will find an agreement on increasing the debt ceiling and avoid a default.
Japan’s currency fell after reaching the strongest in eight weeks versus the dollar as a government report showed the nation’s current-account surplus unexpectedly shrank to a record for an August. The pound declined as a measure of U.K. retail sales rose less in September than economists forecast. South Korea’s won weakened versus most of its major counterparts as overseas investors cut holdings of the nation’s shares.
Oct. 7 (Bloomberg) -- Thanos Vamvakidis, currency strategist at Bank of America Merrill Lynch, talks about the outlook for the yen and dollar. He spoke Oct. 4 in London. (Source: Bloomberg)
“Investors are thinking the U.S. debt ceiling will be sorted out in the end,” said Satoshi Okagawa, a senior global-markets analyst at Sumitomo Mitsui Banking Corp. in Singapore. “Stocks are rebounding, spurring risk-on moves” and weighing on the yen, he said.
The yen fell 0.5 percent to 97.15 per dollar at 9:26 a.m. London time after appreciating to 96.57, the strongest level since Aug. 12. Japan’s currency dropped 0.3 percent to 131.76 per euro. The dollar was little changed at $1.3563 per euro.
The franc dropped 0.4 percent to 90.64 centimes per dollar and declined 0.2 percent to 1.2292 per euro.
Federal Reserve Bank of Dallas President Richard Fisher said yesterday the U.S. “cannot afford to default” and that debt ceiling talks “will come down to the wire.”
Default is “unthinkable,” and “no one will ever trust us again,” Fisher, who doesn’t vote on policy this year, said in Dallas, Texas. “I don’t think we will default, but it will come down to the wire,” he said.
U.S. Republicans are insisting on changing the 2010 Affordable Care Act, while PresidentBarack Obama refuses to engage in discussions about policy conditions tied to opening the government or raising the debt ceiling. Treasury Secretary Jacob J. Lew has said the U.S. may be unable to pay its bills after Oct. 17.
The MSCI Asia Pacific Index of shares rose 0.3 percent, while futures on the Standard & Poor’s 500 Index expiring in December gained 0.1 percent.