EVENING REPORT

EVENING REPORT
The U.S. currency also headed for its biggest weekly gain and the dollar rose on growing speculation financial firms will weather the credit-market turmoil. the US dollar strengthened against most majors. YEN was poised for a fifth days of declines against the Brazilian real, a favorite of so-called carry trades, in which investors get funds in a country with low borrowing costs and invest where returns are higher. Inflation has eroded consumer purchasing power, and is becoming a concern for the BoJ, making any future rate cuts unlikely The risk is currency swings erase profits. EURO was seen on mixed note with low of 1.5819 levels. German producer prices rose to 3.8% -its fastest pace in 15 years -on higher energy costs. As companies try and pass these additional costs onto consumers, inflation will continue to be a major concern for the ECB. The pound strengthened versus 13 of the 16 most-traded currencies this past week. The pound rose to a two-week high against the dollar after the Wall Street Journal said the Bank of England may take up to 30 billion pounds ($60 billion) of infected mortgages off lenders' balance sheets to ease the credit crisis. The Australian dollars advanced signs the credit squeeze may be easing, spurring investors to buy higher-yielding assets funded with loans in Japan and climbed to its highest in almost six weeks as investors resumed so-called carry trades after Merrill Lynch & Co. yesterday wrote down less debt than some analysts forecast.
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