While you were sleeping: Glum Americans lift yen

While you were sleeping: Glum Americans lift yen

Sept. 29 (BusinessDesk) - The yen strengthened against the greenback after U.S. consumer confidence fell more than expected, with Americans less positive about the labour market in the world’s biggest economy.

U.S. consumer confidence fell to 48.5 in September based on the Conference Board’s confidence index, missing the 52.1 forecast in a Bloomberg survey and the lowest reading in seven months.

The yen gained to its strongest since the Bank of Japan sold its currency on Sept. 15, when it reached a 15-year low 82.88 yen per dollar.

Japan’s currency recently traded at 83.82, which is 0.5% stronger than yesterday. The U.S. dollar fell 0.9% to $1.3567 per euro, the lowest since April 15.

While the BOJ is taking steps to weaken the strong yen, which erodes the competitiveness of the nation’s exports, traders are betting the Federal Reserve will extend its quantitative easing measures – printing money to help underpin the U.S. economy.

The global economy recovery is likely to struggle into 2011, according to International Monetary Fund First Deputy Managing Director John Lipsky.

He told the Depository Trust and Clearance Corp Executive Forum that global growth will probably miss the 3.7% annual pace the IMF had forecast. The global economy expanded at a 4.7% annual pace in the first half of this year, he said.

The weaker dollar helped drive up commodity prices.

Gold charted a new record high of US$1,311.80 an ounce on the New York Mercantile Exchange. Crude oil for November delivery edged up 0.3% to US$76.78 a barrel.

Stocks on Wall Street gained amid speculation the Fed will extend its quantitative easing measures and on news of more M&A activity and better-than-expected earnings from Walgreen, the biggest U.S. drugstore chain. Walgreen’s shares jumped 11%.

Endo Pharmaceuticals climbed 8.2% after announcing it will buy generic drugmaker Qualitest Pharmaceuticals for about US$1.2 billion.

The Standard & Poor’s 500 Index rose 0.1% to 1143.27 and the Dow Jones Industrial Average advanced 0.1% to 10826.27. Pfizer led the advance on the Dow, climbing 1.3%.

U.S. Treasuries rallied after strong demand at a sale of US$35 billion of five-year notes. The Treasury sold the 2015 notes at a record low yield of 1.26%

In trading, the yield on five-year notes fell 6 basis points to 1.23%, a two-year low, following the decline in consumer confidence.

Stocks in Europe were generally weaker. Germany’s DAX 30 fell 0.04% and France’s CAC 40 slipped 0.1%.

Lloyd's of London reported that first-half pretax earnings halved after record claims from the U.S. oil spill and Chile’s earthquake, and the insurance market sees no let-up.

Earnings fell to 628 million pounds from 1.32 billion pounds in the previous year.

(BusinessDesk)

© Scoop Media