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Yesterday the yen rose against all of its 16 major counterparts as concern increased that Europe’s sovereign- debt crisis threatens global economic growth and stocks dropped amid safety demand. Japan’s currency reached an almost three-week high versus the dollar on speculation the country’s companies will repatriate overseas earnings before the end of the fiscal year on March 31. Speculation Japanese companies are repatriating overseas earnings before fiscal year-end also boosted the yen.
The 17-nation currency euro fell from almost a one-month high versus the dollar after economic confidence in the region unexpectedly declined in March. An index of executive and consumer sentiment in the 17- nation euro area fell to 94.4 from a revised 94.5 in February, the European Commission said. Economists had forecast a gain to 94.5 from a previously reported 94.4, the median of 29 estimates showed. A draft statement dated March 23 showed that European governments are preparing for a one- year increase in the ceiling on rescue aid for indebted nations to 940 billion euros ($1.2 trillion) to keep the crisis at bay. German Chancellor Angela Merkel said on March 26 her country may back plans for the European Financial Stability Facility and the European Stability Mechanism to run in parallel.
The pound rose the most in two weeks against the euro after a European report showed consumer confidence fell, boosting the appeal of U.K. assets as a haven. Gilts handed investors a 1.8 percent loss this year, according to indexes the European Federation of Financial Analysts Societies. Treasuries dropped 1.2 percent in the period. U.K. house prices fell 0.9 percent in March from a year earlier, the first decline in six months, Nationwide said. U.K. banks granted fewer loans for homes than economists predicted in February, Bank of England data showed.
EUR/USD: yesterday the pair decreased to $1.3250, but restored later.
GBP/USD: yesterday the pair traded nearby $1.5900.
USD/JPY: yesterday the pair fell to Y82.00.
On Friday, European central bankers and finance ministers gather for the informal ECOFIN meeting, in Copenhagen, which continues into Saturday. European data starts at 0600GMT with German retail sales data, while a raft of France data at 0645GMT includes Q4 Maastricht debt data and 2011 public deficit and debt data as well as February consumer spending and PPI. EMU flash HICP data for March is also due, at 0900GMT. US data starts at 1230GMT when personal income is expected to rise 0.4% in February. At 1355GMT, the Michigan Sentiment Index is expected to be revised up to a reading of 75.0 in March from the 74.3 preliminary estimate. US data continues at 1400GMT with the latest BLS State Unemployment data and rounds off at 2015GMT with C&I Loans data.
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