The dollar fell against the euro but climbed on a sliding yen on Monday after the U.S. government seized control of mortgage companies Fannie Mae and Freddie Mac to shore up the U.S. housing market and protect against more global financial turbulence.
The Japanese currency was the major loser as the move seemed to lessen one major risk to global financial markets and the U.S. economy, reversing last weeks' broad surge on a flight to safety.
The Japanese currency was the major loser as the move seemed to lessen one major risk to global financial markets and the U.S. economy, reversing last weeks' broad surge on a flight to safety.
The yen had shot higher last week as growing risk aversion led investors to cut back leveraged carry trades funded in the Japanese currency.
Now some of that process is reversing, knocking the yen broadly lower while boosting the euro and commodity currencies like the Australian dollar.
The euro jumped to 155.35 yen, up 1 % from late in New York on Friday and shot as high as 156.93 yen on trading platform EBS in early Asian trade.
Against the dollar, the euro rose 0.5 % to USD 1.4334, off an 11-month low of USD 1.4197 touched last week.
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