Dollar Falls to Two-Year Low Versus Yen as Retail Sales Decline

[marmar]

from Bloomberg:



Dollar Falls to Two-Year Low Versus Yen as Retail Sales Decline

By Ye Xie and Bo Nielsen

Jan. 15 (Bloomberg) -- The dollar fell to the lowest level since 2005 against the yen after U.S. retail sales dropped in December, bolstering speculation the economy is headed for recession.

Traders also pushed the dollar to the weakest ever versus the Swiss franc on speculation the Federal Reserve will cut its target interest rate as much as 0.75 percentage point this month to sustain economic growth. The yen rose against all of the 16 most-actively traded currencies on concern that dimming demand from the U.S., Japan's biggest export market, will reduce Japanese investors' appetite for overseas purchases.

``The dollar is in trouble,'' said David Mozina, a senior currency strategist at Lehman Brothers Holdings Inc. in New York. ``The continued implosion of interest-rate support is pressuring the dollar.''

The U.S. currency dropped to 107.03 yen at 1:45 p.m. in New York, from 108.16 yen yesterday, touching the lowest since June 2005. The yen advanced to 158.81 per euro from 160.84, reaching the strongest since September.

...(snip)...

`Fueling Risk Aversion'

The dollar's decline began earlier as Citigroup Inc. posted a record quarterly loss of $9.83 billion, raising concern that financial companies' losses from home-loan defaults will mount.

Retail sales fell 0.4 percent last month, after increasing a revised 1 percent in November, the Commerce Department said in Washington. The median forecast in a Bloomberg survey was for sales to be flat. Producer prices increased 6.3 percent in December from a year earlier, after a 7.2 percent pace in November, the government said separately.

``The U.S. housing and financial crises are fueling risk aversion in the market and people are covering'' bets against the yen, said Carl Forcheski, vice president on the corporate currency sales desk at Societe Generale SA in New York. ``The Japanese economy has difficulties, but the yen is more affected by investment flows'' from Japanese investors. ......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601083&sid=ay2IFgWCHUb4&refer=currencies

[Hydra]

1. Meltdown!!!

:popcorn:

No wonder Little Boots wants to go to Iran.

[Double T]

2. Regardless of how many band-aids and tourniquets they apply to our hemorrhaging economy..........

I'm afraid the the whole thing is doomed to bleed out. Without an abundance of good paying jobs there is no way to fix the mess that has been created by corrupt criminal corporate america, greedy wall street and their investors along with our sellout incompetent legislators and presidents.

[Hydra]

3. The fact that there aren't any jobs is telling

This was quite deliberate. I wonder what they plan to force on us to "fix" it.