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Dollar rebounds vs. yen as risk appetite returns on recovering U.S. stock market

Dollar rebounds vs. yen as risk appetite returns on recovering U.S. stock market

The dollar recovered against the yen Wednesday as U.S. stocks rebounded, refreshing traders' appetite for riskier investments.
The shrinking credit market has roiled global stocks in recent weeks, turning traders away from carry trades, an investment strategy that involves selling off the low-yielding yen in favor of better returns on the dollar.
As Wall Street rose Wednesday, the dollar climbed against the Japanese currency to 114.88 yen from 114.56 late Tuesday.
The dollar weakened versus the euro despite a report showing German consumer confidence slipped for the first time in six months amid market turbulence.
The 13-nation euro rose to $1.3645 late Wednesday from $1.3634 after dropping earlier in the session on the report by Germany's GfK research group. Its forward-looking consumer climate indicator for September stood at 7.6 points _ down from a revised 8.5 in August. The figure fell short of analysts' expectations and marked the first drop since March.
GfK said August's market turmoil, a result of the subprime credit fallout in the U.S., helped put "a damper on the euphoria of previous months."
The dollar remains sensitive to mixed predictions as to whether the U.S. Federal Reserve will cut its main interest rate next month to ease market volatility stemming from the subprime crisis.
Analysts doubt the European Central Bank will raise its key refinancing rate to 4.25 percent next month because of the scarcity of credit globally.
Higher interest rates, used to combat inflation, can strengthen a currency by giving investors higher returns on investments denominated in it.
In other New York trading, the British pound rose to $2.0151 from $2.0072. The dollar bought 1.1990 Swiss francs, slipping from 1.1996, and 1.0607 Canadian dollars, down from 1.0628.


Updated : 2021-04-21 17:20 GMT+08:00