LONDON, Nov 12: The dollar hit an 18-month low against the yen on Monday as jitters over the US sub-prime mortgage crisis led investors to suspend carry trades that depress the Japanese unit, dealers said.
The US unit hit 109.13 yen, dropping below the psychologically important 110 level for the first time since May 2006 as speculators exited risky trades.
In late European trade, the dollar stood at 109.69 yen, down from 110.66 in New York late on Friday.
The euro weakened against both the yen and dollar and was trading at $1.4542 in late trade against $1.4677 late on Friday. Last week the European single currency struck an historic high of $1.4752.
The euro fell to 159.60 yen against 162.43 late on Friday.
Carry trades are when investors borrow in Japan, where interest rates are low, and then invest in assets in countries where interest rates are high. This means the yen is sold against other higher-yielding currencies.
In late European trade Monday, the euro was changing hands at 1.4542 dollars, against 1.4677 dollars late on Friday, at 159.60 yen (162.43), 0.7055 pounds (0.7020) and 1.6410 Swiss francs (1.6475).
The dollar stood at 109.69 yen (110.66) and 1.1282 Swiss francs (1.1224).—AFP
