Tuesday 28th October 2008
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The yen gained to 118.1 per euro in New York, from 118.96 on Friday. It strengthened to as much as 113.64, the most in more than six years. The yen rose to 93.86 per dollar from 94.32 on Friday, when it strengthened to as much as 90.93.
The Group of Seven nations said in an unscheduled statement that excessive movements in the currency pose a risk to financial stability.
US Treasuries fell as the federal government's sale of US$64 billion in short-term securities reduced demand for the debt. Oil fell, while copper and gold rebounded.
Currencies and stocks in emerging markets fell on widening concern the global economy will fall into recession and the International Monetary Fund stepped in to help the Ukraine and Hungary.
European Central Bank President Jean-Claude Trichet said in a speech in Madrid that he may cut interest rates as soon as next week, adding to his most recent 50 basis point reduction. Trichet described such as move as "a possibility" rather than a certainty.
Stocks on Wall Street were mixed. General Motors fell 4% to US$5.71 and JPMorgan Chase declined 3.1% to US$34.35. Verizon Communications jumped 12% to US$28.11 after the US phone company posted higher-than-expected sales.
The Dow Jones Industrial Average fell 2.4% to 8175.77 and the Standard & Poor's 500 Index fell 3.2% to 848.92. The Nasdaq Composite fell 2.9% to 1505.9.
US government figures showed home purchases unexpectedly rose 2.7% in September, against expectations of a decline.
The British pound slid to the lowest level in almost five years against the euro and a record low against the euro as weak economic reports stoked expectations of a recession.
European stocks fell for the fifth day, with the Dow Jones Stoxx 600 Index sliding 1.9% to 195.04. Deutsche Bank tumbled 15% 25.69 euros and Deutsche Postbank declined 17% to 7.995 euros. Frances Societe Generale dropped more than 10%.
Germany's DAX 30 gained 0.9% to 4334.64 and France's CAC 40 slid almost 4% to 3067.35. In the UK, the FTSE 100 fell 0.8% to 3852.59 after a report showed house prices had their biggest decline in seven years. Chancellor of the Exchequer Alistair Darling warned that the economic crisis will be more prolonged than had initially been expected, according to the Sunday Times.
The IMF agreed to loans of US$16.5 billion for Ukraine and reached initial agreement for a financial rescue package for Hungary. Belarus and Pakistan have also asked the IMF for support.
Crude oil fell to the lowest in almost a year and a half in New York amid speculation demand for fuel will wane as global growth slows.
Crude for December delivery fell 1.4% to US$63.22 a barrel on the New York Mercantile Exchange. Oil has slumped 57% from its July record of US$147.27 a barrel.
Copper gained after sales of a report showed new houses in the US rose in September. Copper futures for December delivery jumped 7% to US$1.805 a pound on the New York Mercantile Exchange.
Gold futures for December delivery rose 1.7% to US$742.90 an ounce on the New York Mercantile Exchange.
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