* Obama determines GM bankruptcy best option -report
* Dlr, yen surge stopped as US says report inaccurate
* Dent in risk appetite sends Aussie, kiwi lower
By Satomi Noguchi
TOKYO, April 1 (Reuters) - The dollar and the yen rose on
Wednesday on a report that the White House was prepared to let
U.S. automakers go bankrupt, but retreated from the day's highs
after a U.S. administration official said it was inaccurate.
Bloomberg reported that U.S. President Barack Obama has
determined that a prepackaged bankruptcy is the best way for
General Motors Corp <GM.N>, quoting people familiar with the
matter.[]
But the yen and dollar came off the day's highs after a
senior U.S. administration official said President Barack Obama's
thinking on the crisis facing GM has not changed since Monday,
saying the report was "not accurate."[]
"The report about Chrysler's possible bankruptcy is now
impacting the whole market," said a senior trader at a Japanese
bank.
"U.S. stock futures are looking terrible after a positive
close in New York, prompting market players to dump currencies
they had bought against the yen," the trader said.
U.S. stock futures <SPc1> were 1 percent lower, and fell as
much as 1.9 percent at one stage.
The dollar index, a gauge of the greenback's performance
against six major currencies, rose 0.4 percent to 85.850 <.DXY>,
but was off an earlier high of 85.940.
The euro was down 0.4 percent from late New York trade the
previous day to $1.3193 <EUR=> and shed 0.7 percent to 130.29 yen
<EURJPY=>.
The dollar fell 0.1 percent to 98.85 yen <JPY=>.
The greenback had earlier risen to 99.48 yen, the highest
since March 5, after the Bank of Japan's tankan survey showed
confidence among Japan's big manufacturers tumbled at its fastest
pace ever in the first quarter to the worst on record.
The survey highlighted the pain companies are facing as the
global economic crisis scythes through Japan's exports.
[]
Reduced investor risk appetite sent higher-yielding
currencies such as the Australian dollar lower, which was also
dented by data showing Australian retail sales fell by the most
in nine years, adding to the case for a cut in interest rates
next week.
But influential central bank watcher and columnist Terry
McCrann argued that the Reserve Bank of Australia would stand
pat. McCrann gave no source for his belief but has been correct
on enough RBA decisions to command market attention.
[]
Patrick Bennett, a currency analyst at Societe Generale said
in a client note that he is looking look for a 50 basis point
cut, citing the central bank's lower growth outlook and domestic
data that has been mixed but is on balance weak.
After slashing rates by 400 basis points since September the
RBA left rates unchanged at 3.25 percent in March.
The New Zealand dollar extended a big slide after New
Zealand's central bank warned on Wednesday that a recent rise in
market interest rates was unwarranted and out of sync with its
view of the economy.[]
The Aussie fell 0.5 percent to $0.6878 <AUD=D4> and dropped
to 0.6 percent to 67.93 yen <AUDJPY=R>.
The kiwi slid 0.8 percent to $0.5548 <NZD=D4> and lost 1.1
percent to 54.79 yen <NZDJPY=R>.
(Additional reporting by Shinichi Saoshiro; Editing by Edwina
Gibbs)
