Dollar climbs two-year peaks, risk stays in focus
Forex dollar scales two-year peak versus basket of currencies, Euro slumps to two-year low against dollar.
A brief rise in stocks on Wall Street and aggressive dollar selling by the Brazilian central bank helped to lend some stability to emerging market currencies, limiting the dollar’s upward momentum, analysts said.
Emerging market currencies have borne the brunt of the global financial crisis as U.S.-based investors offloaded assets in developing markets and repatriated the money.
Analysts were skeptical that the calm would be sustainable, with investors remaining wary of a sharp global economic downturn and a poor profit outlook for corporations.
“The Brazilian central bank intervened materially and bought reals against the dollar … that seems to have calmed the price action, not only in the G10, but global currencies as well,
Dollar gains vs yen, falls vs euro as risk edges up
Euro, dollar rise vs yen as modest risk-taking resumes
U.S. jobless claims fall, easing some economic worries
Global stocks tumble but Wall St points at higher open (Updates prices, adds comment, detail, byline)
New York, Oct 16 (Reuters) – The dollar rose against the yen on Thursday but slipped against the euro as investors hoped government moves to inject cash into troubled banks would get credit flowing and help stabilize world financial markets.
Trading was choppy, though, as worries persisted that fallout from the credit crisis that began more than a year ago will eventually plunge the world economy into recession.
Asian stock markets plunged on Thursday, led by a 11.5 percent decline in Japan’s Nikkei average .N225, taking their cue from U.S. stocks, which on Wednesday posted their biggest one-day slide since October 1987.
That prompted investors to seek shelter in dollar assets, but that move faded a bit on Thursday as data showed the number of Americans filing for first-time jobless benefits fell last week and U.S. stocks opened on a steady note.
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