While you were sleeping: Yen falls after N.Korea test, ABN Amro posts loss

Tuesday 26th May 2009

The yen fell against the U.S. dollar and the euro after North Korea conducted an underground nuclear test and launched three missiles, raising the threat to regional security and undermining the Hermit Kingdom’s return to six-party talks aimed at end its nuclear programme.

"North Korea's nuclear and ballistic missile programs pose a grave threat to the peace and security of the world, and I strongly condemn their reckless action," U.S. President Barack Obama. "The United States and the international community must take action in response."

The U.N. Security Council was to hold emergency talks on the tests. North Korea said the test was part of its efforts to “bolster up its nuclear deterrent for self defense,” according to a statement from the Korean Central News Agency.

The yen fell from a two month high against the dollar. The euro strengthened after a German business confidence survey improved for a second month.The yen traded at 94.79 per dollar from 94.77 and weakened to 132.79 per euro, from 132.67.

The euro held at around $1.4003. Trading was lighter than usual, with the U.S. and U.K. markets closed for public holidays.

ABN Amro NV, the Dutch bank controlled by the government, posted a first-quarter loss of 886 million euro, mainly reflecting businesses being transferred to Royal Bank of Scotland as part of efforts to restructure the group.

The Dutch government took control in October when it took over the local operations of Fortis, including its holding in ABN Amro.

European stocks edged up, with the Dow Jones Stoxx 600 climbing 0.2% to 207.36.

French drugmaker Sanofi-Aventis rose 1.6% after the company won a US$190 million order for swine-flu vaccine.

Roche Holding AG gained 1.6% after saying it had positive results from its Mircera treatment with anemia patients with chronic kidney disease.

Deutsche Bank fell about 1% after Germany financial regulator began an investigation into potential regulatory violations in its corporate security department.

German business confidence rose this month, helped by government fiscal stimulus worth 82 billion euros and interest rate cuts. The Ifo Institute’s business climate index, which surveys 7,000 executives, rose to 84.2 from 83.7 last month, stoking optimism the worst of the recession is over.

The Ifo’s measure of expectations rose to 85.9 from 83.9, while its gauge of current conditions slipped to 82.5 from 83.5.

Porsche slipped 3.1% after confirming it got a 700 million euro loan from its 51% Volkwagen and was forced to deny media reports that it was in greater financial difficulties.

The DAX Index fell 0.01% to 4918.45 and France’s CAC 40 rose 0.3% to 3236.16. Copper for August delivery rose 1.4% to 36,910 yuan a ton before closing at 36,780 yuan, according to Bloomberg.

U.S. crude oil futures for July delivery fell by 39 cents to US$61.27 a barrel.

Organisation of the Petroleum Exporting Countries (OPEC) ministers are expected to keep oil supplies unchanged when they meet in Vienna this week because prices have increased.

Saudi Arabian Oil Minister Ali al-Naimi said OPEC would "probably stay the course" with prices rising to as much as US$75 a barrel as demand picks up, Bloomberg reported.

The International Monetary Fund’s deputy managing director John Lipsky said a pick up in the price of oil reflects optimism that global recession is easing.

Businesswire.co.nz

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