Euro and dollar up against the yen

Published: 6 Feb at 9 AM Tags: Euro, Dollar,

The US dollar and the euro have hit 33-month highs against the yen ahead of a widely expected move to replace present governor of the Bank of Japan with a more dovish leader. Prime Minister Shinzo Abe is continuing to put pressure on the central bank to ramp up monetary easing and Governor Masaaki Shirakawa said this week that he intends to step aside three weeks early.

On Wednesday the dollar surged to 93.91 yen and the euro hit 127.63 yen. The single currency also gained against the dollar ending at $1.3585. The euro is being buoyed by reports that the crisis in the eurozone may be beginning to ease. France’s President Francois Hollande has called for moves to protect the currency’s exchange rate, but appears to have little support from other European leaders.

A meeting at the European Central Bank later this week could see efforts to weaken the euro as many countries are still struggling with recession.

Local retail sales figures coming out of Australia saw the dollar slip to $1.0345, the lowest it has been in six weeks. A drop in value makes it more likely that the government could push up interest rates.

Sterling has also fallen to $1.5630, its lowest level in more than five weeks leading some to believe the Bank of England could introduce another round of QE in an attempt to boost the economy.