Yen, dollar gain, peso falls on flu jitters

TOKYO - The yen and the dollar rose on Monday and the Mexican peso fell on concern about the spread of swine flu, which has killed up to 81 people in Mexico and infected people in the United States and Canada.

By (Reuters)

Published: Mon 27 Apr 2009, 10:27 AM

Last updated: Thu 2 Apr 2015, 8:29 AM

The World Health Organisation declared the flu a “public health emergency of international concern” that could become a pandemic or global outbreak of serious disease.

The Mexican peso fell more than 2 percent in Asian trade, weakening past 13.60 per dollar from a close of 13.284 pesos on Friday.

The dollar dropped to its lowest in a month against the Japanese currency but gained against the Australian and New Zealand dollars and edged higher against the euro.

Analysts and traders said investors had bought perceived safe-haven currencies on concern about the spread of the virus.

“It’s not been received too well and there are fears that ultimately it could lead to reduced travel and tourism, reduced stays in hotels, adding to the slowdown globally and specifically for the particular countries involved,” said Sue Trinh, senior currency strategist at RBC Capital Markets in Sydney.

The dollar dropped to 96.62 yen in early Asian trade, its lowest in a month, before edging back to 96.87 yen, down 0.3 percent on the day.

The euro fell 0.8 percent to 127.70 yen and dropped 0.4 percent to $1.3187.

The Australian dollar fell 0.9 percent to $0.7163 and the New Zealand dollar shed 1 percent to $0.5660.

A teacher in New Zealand just returned from Mexico was being treated for flu-like symptoms while Australia said two suspected cases had tested negative for the disease.

“The extent of the outbreak and its overall impact will have to be seen first before we can make any judgments of its effect on the broader market, such as what this means for the dollar,” said Takahide Nagasaki, chief FX strategist at Daiwa Securities SMBC in Tokyo.

“What needs to be watched going forward is the kind of impact the outbreak will have on North American trade and the movement of people.”

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