Dollar, Yen Rise on Economic Growth Jitters
NEW YORK -- The dollar and yen strengthened on increasing worries that further monetary-policy tightening in China and lingering credit concerns in the nations that use the euro will hurt an incipient global economic recovery.</br></br>The yen was the biggest winner among the major currencies in the hunt for safe-haven assets, hitting a nine-month high against the euro intraday. The yen also benefited after the Bank of Japan frustrated expectations for further monetary stimulus at its Tuesday's policy meeting.</br></br>Investors pared back bets on higher-yielding currencies ahead of the Federal Reserve's rate-setting decision set for Wednesday. The New Zealand dollar, for example, slid as much as 1% against its U.S. counterpart.</br></br>"The overriding factor in the [currency] markets is the concern that a self-sustaining global economic recovery will be able to gain traction," said Carl Forcheski, director of foreign exchange at Societe Generale in New York. "You have fiscal problems in a lot of governments in Europe as well as in the U.S. And on top of that, you have China instituting initiatives to slow things down, when what we need right now is general economic growth."</br></br>By late afternoon Tuesday in New York, the euro had weakened to $1.4079 from $1.4154 late Monday. The dollar moved to 89.64 yen from 90.23 yen. The euro weakened to 126.20 yen from 127.71 yen. The U.K. pound weakened to $1.6143 from $1.6241. The dollar strengthened to 1.0461 Swiss francs from 1.0397 francs.