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Dollar Hits New 15-Year Low Versus Yen, Near Post-War Worst

Dollar Hits New 15-Year Low Versus Yen, Near Post-War Worst
3/16/2011 1:26 PM ET

The dollar plunged to its lowest in more than 15 years versus the yen on Wednesday, as funds rushed back to Japan amid the nation's worst crisis in generations.

A second nuclear reactor may have ruptured with a radioactive release, aggravating the nation's attempts to contain a nuclear crisis brought on by Friday's earthquake.

The buck tumbled to Y79.96 after noon ET, breaking through support to hit its lowest since 1995. The buck was within a hair of a post-World War II low of 79.75.

A move below that benchmark is expected to trigger intervention from Japanese authorities. A stronger yen hurts exporters.

The dollar help up well against other major currencies after government figures showed U.S. producer prices jumped on higher energy costs.

U.S. housing starts fell the most since 1984, but traders bet inflationary pressures will compel the Federal Reserve to throw resist a third tranche of asset purchases this summer.

The dollar improved to $1.39 versus the euro, and rebounded to $1.60 versus the sterling. With the risk trade coming off, the dollar was back within a penny of par against its Canadian counterpart.

In economic news, the Labor Department said its producer price index jumped by 1.6 percent in February following a 0.8 percent increase in January. Economists had been expecting producer prices to increase by a much more modest 0.7 percent.

Housing starts in the U.S. fell by much more than expected in February following an unexpectedly strong jump in January.

According to figures released by the Commerce Department on Wednesday, 479,000 new privately owned houses were started in February, 22.5 percent below the revised January figure of 618,000.

Eurozone inflation breached the European Central Bank (ECB) target for a third straight month in February due to higher energy prices.

Consumer price index (CPI) rose 2.4 percent year-on-year, following a 2.3 percent increase in January, European Union Statistical agency Eurostat said Wednesday, confirming a preliminary report.

by RTT Staff Writer

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