Forex - US dollar weaker against most major currencies as credit concerns ease

Forex - US dollar weaker against most major currencies as credit concerns ease

	Published : Wed, 14 Nov 2007 00:21 By : Agencies Print this Story

SYDNEY (Thomson Financial) - The US dollar was weaker against major currencies except the yen in midmorning trade

Wednesday, extending overnight losses, after positive news from Goldman Sachs and Wal-Mart Stores eased concerns about credit markets and the US economy.

High-yielding currencies like the euro, sterling and Australian dollar strengthened against the greenback overnight as yen-funded carry trade picked up and Wall Street rallied, reflecting investors' renewed appetite for risk.

''It is clear that volatility is back with a vengeance, but the tone set on Wall Street today suggests that calm might be returning. The past few days have been similar in feel to mid-August when the markets blew out after the credit crunch bit hard,'' said John Noonan, an analyst at Thomson IFR.

Goldman Sachs said it doesn't expect significant losses from the subprime mortgage crisis and Wal-Mart, the world's largest retailer, reported better-than-expected third-quarter profit, which calmed jittery financial markets.

At 9.55 am (2255 GMT), the euro was up at 1.4621 dollars from 1.4600 dollars in late New York trade and the sterling was buying 2.0746 dollars compared with 2.0700 dollars.

The Australian dollar was slightly higher against the greenback at 90 US cents from 89.09 cents overnight amid increased carry-trade activity.

But the greenback held onto gains against the yen, with the pair trading at 110.99 yen compared with 110.90 yen in late US trade.

Volatility is likely to remain a key theme in financial markets with investment banks expected to report further losses from the subprime lending saga.

''While markets became cautiously optimistic towards carry trade currencies last night, investor confidence is still fragile. Another slide lower in global equities would likely trigger another bout of

carry trade liquidation,'' said John Kyriakopoulos, head of currency strategy at National Australia Bank.

Sydney at 9.55 am (2255 GMT)

US dollar

110.99 yen

1.1264 sfr

Euro

1.4621 usd

162.26 yen

1.6465 sfr

0.7047 stg

Sterling

2.0746 usd

230.221 yen

2.33665 sfr

Australian dollar

0.9 usd

0.4339 stg

99.865 yen

New Zealand dollar

0.7637 usd

allison.jackson@thomson.com

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