(Updates prices, adds comments, changes byline, dateline,
previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, Feb 19 (Reuters) - High-yielding currencies, led
by the Australian dollar, rose on Tuesday as investors added to
risky trades amid strong gains in commodity prices and
expectations of further interest rate increases in Australia.
Minutes from the Reserve Bank of Australia's February
policy meeting cemented expectations for more interest rate
hikes, boosting the Australian currency's appeal to global
investors. The Aussie rose to three-month highs versus the
greenback.
The yen, meanwhile, gained overnight on a brief bout of
risk aversion following news about writedowns on risky assets
from Barclays Plc and Credit Suisse. However, U.S. stocks
opened higher, taking the steam out of the Japanese currency's
rally.
"This morning, we have seen investors add risk to their
portfolios," said Matthew Strauss, senior currency strategist,
at RBC Capital Markets in Toronto.
"Stock futures are pointing to a higher open and
commodities across the aboard are higher. We have also seen the
high-yielders such as the Aussie and Kiwi (New Zealand dollar)
gain," he added.
The Aussie dollar rose as high as US$0.9237 <AUD=>, levels
last seen in early November. It last traded at US$0.9215, up
0.9 percent from late on Monday.
Minutes from the RBA's Feb. 5 policy meeting showed the
central bank had debated a more aggressive 50 basis point rate
hike. While the RBA decided in the end on a more modest 25
basis point rise in the cash rate to an 11-year high of 7
percent, the minutes pointed strongly to further monetary
tightening ahead. []
The New Zealand dollar rode on the coattails of the
Aussie's rally, climbing to US$0.8022 <NZD=> -- its highest
since July. In early new York trading, it was up 0.6 percent at
US$0.7990.
The U.S. dollar was down 0.2 percent against a basket of
major currencies <.DXY> at 75.974. Against the yen, it slid 0.5
percent to 107.68 yen <JPY=>.
Keeping investors cautious, Credit Suisse <CSGN.VX> said it
has written $2.85 billion off the value of its asset-backed
investments, while Barclays Plc <BARC.L>, Britain's third
largest bank, raised its 2007 writedown on the value of risky
assets to 1.6 billion pounds ($3.1 billion). [].
"We saw the story out of Credit Suisse and Barclays. All of
that plays out concerns about the health of the financial
sector in the wake of the credit crisis," said Omer Esiner,
market analyst at Ruesch International in Washington.
The euro rose to two-week highs of $1.4757 <EUR=>,
according to Reuters data, before slipping to $1.4729, still up
0.5 percent on the day. The single European currency was
slightly higher versus the yen at 158.63 yen <EURJPY=>, but
well off a three-week high near 159 yen set earlier.
The Japanese currency was also benefiting from talk of a
Chinese interest rate hike after data on Tuesday showed a surge
in China's consumer inflation to an 11-year high.
[]
Investors are currently awaiting the NAHB/Wells Fargo
Housing Market index due at 1:00 p.m. (1800 GMT). The report is
expected to show home-builder sentiment for February was
unchanged from January. A weak reading, along with figures on
U.S. housing starts later in the week, could bolster the view
that a slumping housing sector could raise the risk of a
recession, a further negative for the dollar.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Chizu
Nomiyama)
