Forex Investment

LONDON (Thomson Financial) - The euro remained near its new all-time high against the yen and close to its record against the dollar despite the US currency’s rally today.

The European single currency recorded its new yen high of 162.53 yen on expectations strong growth would lead to further interest rate rises for the 13-nation single currency euro zone.

Carry trades, where money is borrowed in countries with low interest rates like Japan to be invested in higher-yielding economies, have grown increasingly popular as the BoJ has taken a cautious approach in raising interest rates.

The euro has also been firm against the dollar and is not far off another attempt at the 1.3666 usd high achieved in December 2004 despite today’s dollar recovery.

Currency players have driven the euro higher in recent months on growing expectations of further interest rate rises by the European Central Bank, with most economists forecasting a quarter point hike to 4.00 pct in June. Meanwhile, the US Federal Reserve is widely expected to start cutting its key Fed funds rate from the current 5.25 pct some time this year because of soft economic data.

The narrowing of this yield differential makes the euro more attractive.

“The European market focus remains focused on the relative outlook for growth, inflation and interest rates in the US and Europe, as the key to unlocking the door between comparative performance between US and European bonds, and the euro and the dollar,” said Steve Barrow, currency strategist at Bear Stearns.

“Right now the market perception of growth is looking less clear-cut in the US, while the European outlook goes from strength to strength,” he added.

Elsewhere, the dollar’s recovery pushed the pound way below 2 usd despite rumours the UK’s biggest bank HSBC is having to buy up to 5 bln stg in dollars in order to meet its dividend commitments and another firm housing market survey from the Nationwide, the UK’s largest building society.

The market is now fully pricing in another interest rate hike from the Bank of England next month to 5.50 pct after CPI inflation jumped to a 15-year high of 3.1 pct in March and the UK economy continues to grow above its long-run average.

Steve Pearson, currency strategist at HBOS, noted that since 1982, the pound has spent little time trading at a rate higher than 2 usd. In fact, he said these previous episodes show the pound at or above 2 usd for only 10 days.

London 1620 GMT London 1139 GMT

US dollar

yen 119.48 up from 119.30

sfr 1.2083 up from 1.2080

Euro

usd 1.3593 down from 1.3598

yen 162.47 up from 162.45

sfr 1.6428 down from 1.6432

stg 0.6830 up from 0.6822

Sterling

usd 1.9902 down from 1.9931

yen 237.85 down from 237.91

sfr 2.4051 down from 2.4077

Australian dollar

usd 0.8256 down from 0.8296

stg 0.4148 down from 0.4161

yen 98.69 down from 99.03

pan.pylas@thomson.com

pp/slm

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

LONDON (Thomson Financial) - The euro remained near its new all-time high against the yen and close to its record against the dollar despite the US currency’s rally today.

The European single currency recorded its new yen high of 162.53 yen on expectations strong growth would lead to further interest rate rises for the 13-nation single currency euro zone.

Carry trades, where money is borrowed in countries with low interest rates like Japan to be invested in higher-yielding economies, have grown increasingly popular as the BoJ has taken a cautious approach in raising interest rates.

The euro has also been firm against the dollar and is not far off another attempt at the 1.3666 usd high achieved in December 2004 despite today’s dollar recovery.

Currency players have driven the euro higher in recent months on growing expectations of further interest rate rises by the European Central Bank, with most economists forecasting a quarter point hike to 4.00 pct in June. Meanwhile, the US Federal Reserve is widely expected to start cutting its key Fed funds rate from the current 5.25 pct some time this year because of soft economic data.

The narrowing of this yield differential makes the euro more attractive.

“The European market focus remains focused on the relative outlook for growth, inflation and interest rates in the US and Europe, as the key to unlocking the door between comparative performance between US and European bonds, and the euro and the dollar,” said Steve Barrow, currency strategist at Bear Stearns.

“Right now the market perception of growth is looking less clear-cut in the US, while the European outlook goes from strength to strength,” he added.

Elsewhere, the dollar’s recovery pushed the pound way below 2 usd despite rumours the UK’s biggest bank HSBC is having to buy up to 5 bln stg in dollars in order to meet its dividend commitments and another firm housing market survey from the Nationwide, the UK’s largest building society.

The market is now fully pricing in another interest rate hike from the Bank of England next month to 5.50 pct after CPI inflation jumped to a 15-year high of 3.1 pct in March and the UK economy continues to grow above its long-run average.

Steve Pearson, currency strategist at HBOS, noted that since 1982, the pound has spent little time trading at a rate higher than 2 usd. In fact, he said these previous episodes show the pound at or above 2 usd for only 10 days.

London 1620 GMT London 1139 GMT

US dollar

yen 119.48 up from 119.30

sfr 1.2083 up from 1.2080

Euro

usd 1.3593 down from 1.3598

yen 162.47 up from 162.45

sfr 1.6428 down from 1.6432

stg 0.6830 up from 0.6822

Sterling

usd 1.9902 down from 1.9931

yen 237.85 down from 237.91

sfr 2.4051 down from 2.4077

Australian dollar

usd 0.8256 down from 0.8296

stg 0.4148 down from 0.4161

yen 98.69 down from 99.03

pan.pylas@thomson.com

pp/slm

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

LONDON (Thomson Financial) - The euro remained near its new all-time high against the yen and close to its record against the dollar despite the US currency’s rally today.

The European single currency recorded its new yen high of 162.53 yen on expectations strong growth would lead to further interest rate rises for the 13-nation single currency euro zone.

Carry trades, where money is borrowed in countries with low interest rates like Japan to be invested in higher-yielding economies, have grown increasingly popular as the BoJ has taken a cautious approach in raising interest rates.

The euro has also been firm against the dollar and is not far off another attempt at the 1.3666 usd high achieved in December 2004 despite today’s dollar recovery.

Currency players have driven the euro higher in recent months on growing expectations of further interest rate rises by the European Central Bank, with most economists forecasting a quarter point hike to 4.00 pct in June. Meanwhile, the US Federal Reserve is widely expected to start cutting its key Fed funds rate from the current 5.25 pct some time this year because of soft economic data.

The narrowing of this yield differential makes the euro more attractive.

“The European market focus remains focused on the relative outlook for growth, inflation and interest rates in the US and Europe, as the key to unlocking the door between comparative performance between US and European bonds, and the euro and the dollar,” said Steve Barrow, currency strategist at Bear Stearns.

“Right now the market perception of growth is looking less clear-cut in the US, while the European outlook goes from strength to strength,” he added.

Elsewhere, the dollar’s recovery pushed the pound way below 2 usd despite rumours the UK’s biggest bank HSBC is having to buy up to 5 bln stg in dollars in order to meet its dividend commitments and another firm housing market survey from the Nationwide, the UK’s largest building society.

The market is now fully pricing in another interest rate hike from the Bank of England next month to 5.50 pct after CPI inflation jumped to a 15-year high of 3.1 pct in March and the UK economy continues to grow above its long-run average.

Steve Pearson, currency strategist at HBOS, noted that since 1982, the pound has spent little time trading at a rate higher than 2 usd. In fact, he said these previous episodes show the pound at or above 2 usd for only 10 days.

London 1620 GMT London 1139 GMT

US dollar

yen 119.48 up from 119.30

sfr 1.2083 up from 1.2080

Euro

usd 1.3593 down from 1.3598

yen 162.47 up from 162.45

sfr 1.6428 down from 1.6432

stg 0.6830 up from 0.6822

Sterling

usd 1.9902 down from 1.9931

yen 237.85 down from 237.91

sfr 2.4051 down from 2.4077

Australian dollar

usd 0.8256 down from 0.8296

stg 0.4148 down from 0.4161

yen 98.69 down from 99.03

pan.pylas@thomson.com

pp/slm

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

LONDON (Thomson Financial) - The euro remained near its new all-time high against the yen and close to its record against the dollar despite the US currency’s rally today.

The European single currency recorded its new yen high of 162.53 yen on expectations strong growth would lead to further interest rate rises for the 13-nation single currency euro zone.

Carry trades, where money is borrowed in countries with low interest rates like Japan to be invested in higher-yielding economies, have grown increasingly popular as the BoJ has taken a cautious approach in raising interest rates.

The euro has also been firm against the dollar and is not far off another attempt at the 1.3666 usd high achieved in December 2004 despite today’s dollar recovery.

Currency players have driven the euro higher in recent months on growing expectations of further interest rate rises by the European Central Bank, with most economists forecasting a quarter point hike to 4.00 pct in June. Meanwhile, the US Federal Reserve is widely expected to start cutting its key Fed funds rate from the current 5.25 pct some time this year because of soft economic data.

The narrowing of this yield differential makes the euro more attractive.

“The European market focus remains focused on the relative outlook for growth, inflation and interest rates in the US and Europe, as the key to unlocking the door between comparative performance between US and European bonds, and the euro and the dollar,” said Steve Barrow, currency strategist at Bear Stearns.

“Right now the market perception of growth is looking less clear-cut in the US, while the European outlook goes from strength to strength,” he added.

Elsewhere, the dollar’s recovery pushed the pound way below 2 usd despite rumours the UK’s biggest bank HSBC is having to buy up to 5 bln stg in dollars in order to meet its dividend commitments and another firm housing market survey from the Nationwide, the UK’s largest building society.

The market is now fully pricing in another interest rate hike from the Bank of England next month to 5.50 pct after CPI inflation jumped to a 15-year high of 3.1 pct in March and the UK economy continues to grow above its long-run average.

Steve Pearson, currency strategist at HBOS, noted that since 1982, the pound has spent little time trading at a rate higher than 2 usd. In fact, he said these previous episodes show the pound at or above 2 usd for only 10 days.

London 1620 GMT London 1139 GMT

US dollar

yen 119.48 up from 119.30

sfr 1.2083 up from 1.2080

Euro

usd 1.3593 down from 1.3598

yen 162.47 up from 162.45

sfr 1.6428 down from 1.6432

stg 0.6830 up from 0.6822

Sterling

usd 1.9902 down from 1.9931

yen 237.85 down from 237.91

sfr 2.4051 down from 2.4077

Australian dollar

usd 0.8256 down from 0.8296

stg 0.4148 down from 0.4161

yen 98.69 down from 99.03

pan.pylas@thomson.com

pp/slm

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

LONDON (Thomson Financial) - The euro remained near its new all-time high against the yen and close to its record against the dollar despite the US currency’s rally today.

The European single currency recorded its new yen high of 162.53 yen on expectations strong growth would lead to further interest rate rises for the 13-nation single currency euro zone.

Carry trades, where money is borrowed in countries with low interest rates like Japan to be invested in higher-yielding economies, have grown increasingly popular as the BoJ has taken a cautious approach in raising interest rates.

The euro has also been firm against the dollar and is not far off another attempt at the 1.3666 usd high achieved in December 2004 despite today’s dollar recovery.

Currency players have driven the euro higher in recent months on growing expectations of further interest rate rises by the European Central Bank, with most economists forecasting a quarter point hike to 4.00 pct in June. Meanwhile, the US Federal Reserve is widely expected to start cutting its key Fed funds rate from the current 5.25 pct some time this year because of soft economic data.

The narrowing of this yield differential makes the euro more attractive.

“The European market focus remains focused on the relative outlook for growth, inflation and interest rates in the US and Europe, as the key to unlocking the door between comparative performance between US and European bonds, and the euro and the dollar,” said Steve Barrow, currency strategist at Bear Stearns.

“Right now the market perception of growth is looking less clear-cut in the US, while the European outlook goes from strength to strength,” he added.

Elsewhere, the dollar’s recovery pushed the pound way below 2 usd despite rumours the UK’s biggest bank HSBC is having to buy up to 5 bln stg in dollars in order to meet its dividend commitments and another firm housing market survey from the Nationwide, the UK’s largest building society.

The market is now fully pricing in another interest rate hike from the Bank of England next month to 5.50 pct after CPI inflation jumped to a 15-year high of 3.1 pct in March and the UK economy continues to grow above its long-run average.

Steve Pearson, currency strategist at HBOS, noted that since 1982, the pound has spent little time trading at a rate higher than 2 usd. In fact, he said these previous episodes show the pound at or above 2 usd for only 10 days.

London 1620 GMT London 1139 GMT

US dollar

yen 119.48 up from 119.30

sfr 1.2083 up from 1.2080

Euro

usd 1.3593 down from 1.3598

yen 162.47 up from 162.45

sfr 1.6428 down from 1.6432

stg 0.6830 up from 0.6822

Sterling

usd 1.9902 down from 1.9931

yen 237.85 down from 237.91

sfr 2.4051 down from 2.4077

Australian dollar

usd 0.8256 down from 0.8296

stg 0.4148 down from 0.4161

yen 98.69 down from 99.03

pan.pylas@thomson.com

pp/slm

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

LONDON (Thomson Financial) - The euro remained near its new all-time high against the yen and close to its record against the dollar despite the US currency’s rally today.

The European single currency recorded its new yen high of 162.53 yen on expectations strong growth would lead to further interest rate rises for the 13-nation single currency euro zone.

Carry trades, where money is borrowed in countries with low interest rates like Japan to be invested in higher-yielding economies, have grown increasingly popular as the BoJ has taken a cautious approach in raising interest rates.

The euro has also been firm against the dollar and is not far off another attempt at the 1.3666 usd high achieved in December 2004 despite today’s dollar recovery.

Currency players have driven the euro higher in recent months on growing expectations of further interest rate rises by the European Central Bank, with most economists forecasting a quarter point hike to 4.00 pct in June. Meanwhile, the US Federal Reserve is widely expected to start cutting its key Fed funds rate from the current 5.25 pct some time this year because of soft economic data.

The narrowing of this yield differential makes the euro more attractive.

“The European market focus remains focused on the relative outlook for growth, inflation and interest rates in the US and Europe, as the key to unlocking the door between comparative performance between US and European bonds, and the euro and the dollar,” said Steve Barrow, currency strategist at Bear Stearns.

“Right now the market perception of growth is looking less clear-cut in the US, while the European outlook goes from strength to strength,” he added.

Elsewhere, the dollar’s recovery pushed the pound way below 2 usd despite rumours the UK’s biggest bank HSBC is having to buy up to 5 bln stg in dollars in order to meet its dividend commitments and another firm housing market survey from the Nationwide, the UK’s largest building society.

The market is now fully pricing in another interest rate hike from the Bank of England next month to 5.50 pct after CPI inflation jumped to a 15-year high of 3.1 pct in March and the UK economy continues to grow above its long-run average.

Steve Pearson, currency strategist at HBOS, noted that since 1982, the pound has spent little time trading at a rate higher than 2 usd. In fact, he said these previous episodes show the pound at or above 2 usd for only 10 days.

London 1620 GMT London 1139 GMT

US dollar

yen 119.48 up from 119.30

sfr 1.2083 up from 1.2080

Euro

usd 1.3593 down from 1.3598

yen 162.47 up from 162.45

sfr 1.6428 down from 1.6432

stg 0.6830 up from 0.6822

Sterling

usd 1.9902 down from 1.9931

yen 237.85 down from 237.91

sfr 2.4051 down from 2.4077

Australian dollar

usd 0.8256 down from 0.8296

stg 0.4148 down from 0.4161

yen 98.69 down from 99.03

pan.pylas@thomson.com

pp/slm

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

LONDON (Thomson Financial) - The euro remained near its new all-time high against the yen and close to its record against the dollar despite the US currency’s rally today.

The European single currency recorded its new yen high of 162.53 yen on expectations strong growth would lead to further interest rate rises for the 13-nation single currency euro zone.

Carry trades, where money is borrowed in countries with low interest rates like Japan to be invested in higher-yielding economies, have grown increasingly popular as the BoJ has taken a cautious approach in raising interest rates.

The euro has also been firm against the dollar and is not far off another attempt at the 1.3666 usd high achieved in December 2004 despite today’s dollar recovery.

Currency players have driven the euro higher in recent months on growing expectations of further interest rate rises by the European Central Bank, with most economists forecasting a quarter point hike to 4.00 pct in June. Meanwhile, the US Federal Reserve is widely expected to start cutting its key Fed funds rate from the current 5.25 pct some time this year because of soft economic data.

The narrowing of this yield differential makes the euro more attractive.

“The European market focus remains focused on the relative outlook for growth, inflation and interest rates in the US and Europe, as the key to unlocking the door between comparative performance between US and European bonds, and the euro and the dollar,” said Steve Barrow, currency strategist at Bear Stearns.

“Right now the market perception of growth is looking less clear-cut in the US, while the European outlook goes from strength to strength,” he added.

Elsewhere, the dollar’s recovery pushed the pound way below 2 usd despite rumours the UK’s biggest bank HSBC is having to buy up to 5 bln stg in dollars in order to meet its dividend commitments and another firm housing market survey from the Nationwide, the UK’s largest building society.

The market is now fully pricing in another interest rate hike from the Bank of England next month to 5.50 pct after CPI inflation jumped to a 15-year high of 3.1 pct in March and the UK economy continues to grow above its long-run average.

Steve Pearson, currency strategist at HBOS, noted that since 1982, the pound has spent little time trading at a rate higher than 2 usd. In fact, he said these previous episodes show the pound at or above 2 usd for only 10 days.

London 1620 GMT London 1139 GMT

US dollar

yen 119.48 up from 119.30

sfr 1.2083 up from 1.2080

Euro

usd 1.3593 down from 1.3598

yen 162.47 up from 162.45

sfr 1.6428 down from 1.6432

stg 0.6830 up from 0.6822

Sterling

usd 1.9902 down from 1.9931

yen 237.85 down from 237.91

sfr 2.4051 down from 2.4077

Australian dollar

usd 0.8256 down from 0.8296

stg 0.4148 down from 0.4161

yen 98.69 down from 99.03

pan.pylas@thomson.com

pp/slm

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

LONDON (Thomson Financial) - The euro remained near its new all-time high against the yen and close to its record against the dollar despite the US currency’s rally today.

The European single currency recorded its new yen high of 162.53 yen on expectations strong growth would lead to further interest rate rises for the 13-nation single currency euro zone.

Carry trades, where money is borrowed in countries with low interest rates like Japan to be invested in higher-yielding economies, have grown increasingly popular as the BoJ has taken a cautious approach in raising interest rates.

The euro has also been firm against the dollar and is not far off another attempt at the 1.3666 usd high achieved in December 2004 despite today’s dollar recovery.

Currency players have driven the euro higher in recent months on growing expectations of further interest rate rises by the European Central Bank, with most economists forecasting a quarter point hike to 4.00 pct in June. Meanwhile, the US Federal Reserve is widely expected to start cutting its key Fed funds rate from the current 5.25 pct some time this year because of soft economic data.

The narrowing of this yield differential makes the euro more attractive.

“The European market focus remains focused on the relative outlook for growth, inflation and interest rates in the US and Europe, as the key to unlocking the door between comparative performance between US and European bonds, and the euro and the dollar,” said Steve Barrow, currency strategist at Bear Stearns.

“Right now the market perception of growth is looking less clear-cut in the US, while the European outlook goes from strength to strength,” he added.

Elsewhere, the dollar’s recovery pushed the pound way below 2 usd despite rumours the UK’s biggest bank HSBC is having to buy up to 5 bln stg in dollars in order to meet its dividend commitments and another firm housing market survey from the Nationwide, the UK’s largest building society.

The market is now fully pricing in another interest rate hike from the Bank of England next month to 5.50 pct after CPI inflation jumped to a 15-year high of 3.1 pct in March and the UK economy continues to grow above its long-run average.

Steve Pearson, currency strategist at HBOS, noted that since 1982, the pound has spent little time trading at a rate higher than 2 usd. In fact, he said these previous episodes show the pound at or above 2 usd for only 10 days.

London 1620 GMT London 1139 GMT

US dollar

yen 119.48 up from 119.30

sfr 1.2083 up from 1.2080

Euro

usd 1.3593 down from 1.3598

yen 162.47 up from 162.45

sfr 1.6428 down from 1.6432

stg 0.6830 up from 0.6822

Sterling

usd 1.9902 down from 1.9931

yen 237.85 down from 237.91

sfr 2.4051 down from 2.4077

Australian dollar

usd 0.8256 down from 0.8296

stg 0.4148 down from 0.4161

yen 98.69 down from 99.03

pan.pylas@thomson.com

pp/slm

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

LONDON (Thomson Financial) - The euro remained near its new all-time high against the yen and close to its record against the dollar despite the US currency’s rally today.

The European single currency recorded its new yen high of 162.53 yen on expectations strong growth would lead to further interest rate rises for the 13-nation single currency euro zone.

Carry trades, where money is borrowed in countries with low interest rates like Japan to be invested in higher-yielding economies, have grown increasingly popular as the BoJ has taken a cautious approach in raising interest rates.

The euro has also been firm against the dollar and is not far off another attempt at the 1.3666 usd high achieved in December 2004 despite today’s dollar recovery.

Currency players have driven the euro higher in recent months on growing expectations of further interest rate rises by the European Central Bank, with most economists forecasting a quarter point hike to 4.00 pct in June. Meanwhile, the US Federal Reserve is widely expected to start cutting its key Fed funds rate from the current 5.25 pct some time this year because of soft economic data.

The narrowing of this yield differential makes the euro more attractive.

“The European market focus remains focused on the relative outlook for growth, inflation and interest rates in the US and Europe, as the key to unlocking the door between comparative performance between US and European bonds, and the euro and the dollar,” said Steve Barrow, currency strategist at Bear Stearns.

“Right now the market perception of growth is looking less clear-cut in the US, while the European outlook goes from strength to strength,” he added.

Elsewhere, the dollar’s recovery pushed the pound way below 2 usd despite rumours the UK’s biggest bank HSBC is having to buy up to 5 bln stg in dollars in order to meet its dividend commitments and another firm housing market survey from the Nationwide, the UK’s largest building society.

The market is now fully pricing in another interest rate hike from the Bank of England next month to 5.50 pct after CPI inflation jumped to a 15-year high of 3.1 pct in March and the UK economy continues to grow above its long-run average.

Steve Pearson, currency strategist at HBOS, noted that since 1982, the pound has spent little time trading at a rate higher than 2 usd. In fact, he said these previous episodes show the pound at or above 2 usd for only 10 days.

London 1620 GMT London 1139 GMT

US dollar

yen 119.48 up from 119.30

sfr 1.2083 up from 1.2080

Euro

usd 1.3593 down from 1.3598

yen 162.47 up from 162.45

sfr 1.6428 down from 1.6432

stg 0.6830 up from 0.6822

Sterling

usd 1.9902 down from 1.9931

yen 237.85 down from 237.91

sfr 2.4051 down from 2.4077

Australian dollar

usd 0.8256 down from 0.8296

stg 0.4148 down from 0.4161

yen 98.69 down from 99.03

pan.pylas@thomson.com

pp/slm

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

LONDON (Thomson Financial) - The euro remained near its new all-time high against the yen and close to its record against the dollar despite the US currency’s rally today.

The European single currency recorded its new yen high of 162.53 yen on expectations strong growth would lead to further interest rate rises for the 13-nation single currency euro zone.

Carry trades, where money is borrowed in countries with low interest rates like Japan to be invested in higher-yielding economies, have grown increasingly popular as the BoJ has taken a cautious approach in raising interest rates.

The euro has also been firm against the dollar and is not far off another attempt at the 1.3666 usd high achieved in December 2004 despite today’s dollar recovery.

Currency players have driven the euro higher in recent months on growing expectations of further interest rate rises by the European Central Bank, with most economists forecasting a quarter point hike to 4.00 pct in June. Meanwhile, the US Federal Reserve is widely expected to start cutting its key Fed funds rate from the current 5.25 pct some time this year because of soft economic data.

The narrowing of this yield differential makes the euro more attractive.

“The European market focus remains focused on the relative outlook for growth, inflation and interest rates in the US and Europe, as the key to unlocking the door between comparative performance between US and European bonds, and the euro and the dollar,” said Steve Barrow, currency strategist at Bear Stearns.

“Right now the market perception of growth is looking less clear-cut in the US, while the European outlook goes from strength to strength,” he added.

Elsewhere, the dollar’s recovery pushed the pound way below 2 usd despite rumours the UK’s biggest bank HSBC is having to buy up to 5 bln stg in dollars in order to meet its dividend commitments and another firm housing market survey from the Nationwide, the UK’s largest building society.

The market is now fully pricing in another interest rate hike from the Bank of England next month to 5.50 pct after CPI inflation jumped to a 15-year high of 3.1 pct in March and the UK economy continues to grow above its long-run average.

Steve Pearson, currency strategist at HBOS, noted that since 1982, the pound has spent little time trading at a rate higher than 2 usd. In fact, he said these previous episodes show the pound at or above 2 usd for only 10 days.

London 1620 GMT London 1139 GMT

US dollar

yen 119.48 up from 119.30

sfr 1.2083 up from 1.2080

Euro

usd 1.3593 down from 1.3598

yen 162.47 up from 162.45

sfr 1.6428 down from 1.6432

stg 0.6830 up from 0.6822

Sterling

usd 1.9902 down from 1.9931

yen 237.85 down from 237.91

sfr 2.4051 down from 2.4077

Australian dollar

usd 0.8256 down from 0.8296

stg 0.4148 down from 0.4161

yen 98.69 down from 99.03

pan.pylas@thomson.com

pp/slm

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

LONDON (Thomson Financial) - The euro remained near its new all-time high against the yen and close to its record against the dollar despite the US currency’s rally today.

The European single currency recorded its new yen high of 162.53 yen on expectations strong growth would lead to further interest rate rises for the 13-nation single currency euro zone.

Carry trades, where money is borrowed in countries with low interest rates like Japan to be invested in higher-yielding economies, have grown increasingly popular as the BoJ has taken a cautious approach in raising interest rates.

The euro has also been firm against the dollar and is not far off another attempt at the 1.3666 usd high achieved in December 2004 despite today’s dollar recovery.

Currency players have driven the euro higher in recent months on growing expectations of further interest rate rises by the European Central Bank, with most economists forecasting a quarter point hike to 4.00 pct in June. Meanwhile, the US Federal Reserve is widely expected to start cutting its key Fed funds rate from the current 5.25 pct some time this year because of soft economic data.

The narrowing of this yield differential makes the euro more attractive.

“The European market focus remains focused on the relative outlook for growth, inflation and interest rates in the US and Europe, as the key to unlocking the door between comparative performance between US and European bonds, and the euro and the dollar,” said Steve Barrow, currency strategist at Bear Stearns.

“Right now the market perception of growth is looking less clear-cut in the US, while the European outlook goes from strength to strength,” he added.

Elsewhere, the dollar’s recovery pushed the pound way below 2 usd despite rumours the UK’s biggest bank HSBC is having to buy up to 5 bln stg in dollars in order to meet its dividend commitments and another firm housing market survey from the Nationwide, the UK’s largest building society.

The market is now fully pricing in another interest rate hike from the Bank of England next month to 5.50 pct after CPI inflation jumped to a 15-year high of 3.1 pct in March and the UK economy continues to grow above its long-run average.

Steve Pearson, currency strategist at HBOS, noted that since 1982, the pound has spent little time trading at a rate higher than 2 usd. In fact, he said these previous episodes show the pound at or above 2 usd for only 10 days.

London 1620 GMT London 1139 GMT

US dollar

yen 119.48 up from 119.30

sfr 1.2083 up from 1.2080

Euro

usd 1.3593 down from 1.3598

yen 162.47 up from 162.45

sfr 1.6428 down from 1.6432

stg 0.6830 up from 0.6822

Sterling

usd 1.9902 down from 1.9931

yen 237.85 down from 237.91

sfr 2.4051 down from 2.4077

Australian dollar

usd 0.8256 down from 0.8296

stg 0.4148 down from 0.4161

yen 98.69 down from 99.03

pan.pylas@thomson.com

pp/slm

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

LONDON (Thomson Financial) - The euro remained near its new all-time high against the yen and close to its record against the dollar despite the US currency’s rally today.

The European single currency recorded its new yen high of 162.53 yen on expectations strong growth would lead to further interest rate rises for the 13-nation single currency euro zone.

Carry trades, where money is borrowed in countries with low interest rates like Japan to be invested in higher-yielding economies, have grown increasingly popular as the BoJ has taken a cautious approach in raising interest rates.

The euro has also been firm against the dollar and is not far off another attempt at the 1.3666 usd high achieved in December 2004 despite today’s dollar recovery.

Currency players have driven the euro higher in recent months on growing expectations of further interest rate rises by the European Central Bank, with most economists forecasting a quarter point hike to 4.00 pct in June. Meanwhile, the US Federal Reserve is widely expected to start cutting its key Fed funds rate from the current 5.25 pct some time this year because of soft economic data.

The narrowing of this yield differential makes the euro more attractive.

“The European market focus remains focused on the relative outlook for growth, inflation and interest rates in the US and Europe, as the key to unlocking the door between comparative performance between US and European bonds, and the euro and the dollar,” said Steve Barrow, currency strategist at Bear Stearns.

“Right now the market perception of growth is looking less clear-cut in the US, while the European outlook goes from strength to strength,” he added.

Elsewhere, the dollar’s recovery pushed the pound way below 2 usd despite rumours the UK’s biggest bank HSBC is having to buy up to 5 bln stg in dollars in order to meet its dividend commitments and another firm housing market survey from the Nationwide, the UK’s largest building society.

The market is now fully pricing in another interest rate hike from the Bank of England next month to 5.50 pct after CPI inflation jumped to a 15-year high of 3.1 pct in March and the UK economy continues to grow above its long-run average.

Steve Pearson, currency strategist at HBOS, noted that since 1982, the pound has spent little time trading at a rate higher than 2 usd. In fact, he said these previous episodes show the pound at or above 2 usd for only 10 days.

London 1620 GMT London 1139 GMT

US dollar

yen 119.48 up from 119.30

sfr 1.2083 up from 1.2080

Euro

usd 1.3593 down from 1.3598

yen 162.47 up from 162.45

sfr 1.6428 down from 1.6432

stg 0.6830 up from 0.6822

Sterling

usd 1.9902 down from 1.9931

yen 237.85 down from 237.91

sfr 2.4051 down from 2.4077

Australian dollar

usd 0.8256 down from 0.8296

stg 0.4148 down from 0.4161

yen 98.69 down from 99.03

pan.pylas@thomson.com

pp/slm

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

LONDON (Thomson Financial) - The euro remained near its new all-time high against the yen and close to its record against the dollar despite the US currency’s rally today.

The European single currency recorded its new yen high of 162.53 yen on expectations strong growth would lead to further interest rate rises for the 13-nation single currency euro zone.

Carry trades, where money is borrowed in countries with low interest rates like Japan to be invested in higher-yielding economies, have grown increasingly popular as the BoJ has taken a cautious approach in raising interest rates.

The euro has also been firm against the dollar and is not far off another attempt at the 1.3666 usd high achieved in December 2004 despite today’s dollar recovery.

Currency players have driven the euro higher in recent months on growing expectations of further interest rate rises by the European Central Bank, with most economists forecasting a quarter point hike to 4.00 pct in June. Meanwhile, the US Federal Reserve is widely expected to start cutting its key Fed funds rate from the current 5.25 pct some time this year because of soft economic data.

The narrowing of this yield differential makes the euro more attractive.

“The European market focus remains focused on the relative outlook for growth, inflation and interest rates in the US and Europe, as the key to unlocking the door between comparative performance between US and European bonds, and the euro and the dollar,” said Steve Barrow, currency strategist at Bear Stearns.

“Right now the market perception of growth is looking less clear-cut in the US, while the European outlook goes from strength to strength,” he added.

Elsewhere, the dollar’s recovery pushed the pound way below 2 usd despite rumours the UK’s biggest bank HSBC is having to buy up to 5 bln stg in dollars in order to meet its dividend commitments and another firm housing market survey from the Nationwide, the UK’s largest building society.

The market is now fully pricing in another interest rate hike from the Bank of England next month to 5.50 pct after CPI inflation jumped to a 15-year high of 3.1 pct in March and the UK economy continues to grow above its long-run average.

Steve Pearson, currency strategist at HBOS, noted that since 1982, the pound has spent little time trading at a rate higher than 2 usd. In fact, he said these previous episodes show the pound at or above 2 usd for only 10 days.

London 1620 GMT London 1139 GMT

US dollar

yen 119.48 up from 119.30

sfr 1.2083 up from 1.2080

Euro

usd 1.3593 down from 1.3598

yen 162.47 up from 162.45

sfr 1.6428 down from 1.6432

stg 0.6830 up from 0.6822

Sterling

usd 1.9902 down from 1.9931

yen 237.85 down from 237.91

sfr 2.4051 down from 2.4077

Australian dollar

usd 0.8256 down from 0.8296

stg 0.4148 down from 0.4161

yen 98.69 down from 99.03

pan.pylas@thomson.com

pp/slm

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.