6 April 2011, 17:51  Euro reaches 14-month high today

The euro rose to its highest in more than a year against the dollar ahead of an expected ECB rate hike, while the yen slid to an 11-month low against the euro and a six-month low against the dollar.
More losses were expected for the yen as investors, such as macro hedge funds, add to bearish bets, with the Bank of Japan looking set to lag other central banks in tightening policy. "The euro (move) is all on interest rate expectations," said John Doyle, strategist at Tempus Consulting in Washington. "It looks more like a series of interest rate hikes." The struggling Japanese currency was in danger of breaching key long-term support levels against most currencies, having already fallen to a 2-1/2 year low against the Australian dollar. The yen has slid since the first G7 intervention in a decade last month, stirring talk of a carry trade revival -- a strategy of selling low-yielding currencies to fund investment in currencies with higher interest rates.
"The yen is taking a lead as the global carry trade makes a return with the Bank of Japan likely to ease policy while the other central banks seek to tighten it," said Lena Komileva, head of G-10 currency strategy at Brown Brothers Harriman.
The euro was up 0.9 percent at 121.88 yen, having earlier touching an 11-month peak, with stop-loss buying earlier in the session adding to its rise. The dollar was up 0.4 percent at 85.20 yen, easing from highs on profit taking by Japanese retail investors.
It scaled a six-month peak having surged 12 percent from its post-World War Two record low of 76.25 yen hit in March, days after Japan's northeast was devastated by a massive earthquake and tsunami. The high-yielding Australian dollar surged to 88.68 yen, its highest since September 2008, with 90 yen seen as the next possible target.

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