This story was printed from TODAYonline 
Friday • October 10, 2008
The dollar hit a seven-month trough against the yen on Friday as equities tumbled again, prompting investors to flee to currencies seen as less exposed to the financial crisis, dealers said.
The dollar fell to as low as 97.91 yen at one point in Asian trading, hitting the lowest point since March. It later stood at 99.18 yen in morning London trade, down from 99.50 in New York late on Thursday.
The British pound fell to a five-year low against the dollar, falling to 1.6792 dollars shortly before 0500 GMT, its lowest level against the greenback since November 200. The pound has been suffered recently from contraction in Britain's domestic economy.
The European single currency eased to 1.3589 dollars from 1.3590 dollars.
In commodity markets, the price of gold bounced above 920 dollars per ounce as the precious metal was bolstered by its safe-haven status amid markets chaos, traders said.
"Investors are evacuating to relatively safe Japan where bad-performing loans in the banking sector have been cleared up," said Kanako Oikawa, senior strategist at Traders Securities.
Investors were also dumping risky investments funded with the cheap yen and bringing back the money to Japan.
Global stock markets slumped on Friday, with double-digit losses in Frankfurt, London and Tokyo, on fears that the financial crisis was spiralling out of control, despite drastic action by authorities.
"Currency players fear that the end of global stock price declines is not in sight yet," Shinkin Central Bank dealer Hiroshi Yoshida told Dow Jones Newswires.
The turmoil raised the stakes ahead of a key meeting in Washington later Friday of finance ministers and central bank governors of the Group of Seven major economies. But hopes of a quick fix to the turmoil were low.
"Even though the G7 ministers might come up with fresh cooperative measures to avoid further financial turmoil, I am not sure if such measures will actually help the market," Oikawa at Traders Securities said.
The worst-hit currencies were those that have benefited from investment inflows in recent years due to their higher interest rates.
In late morning trading in London on Friday, the euro changed hands at 1.3589 dollars against 1.3590 late Thursday, at 135.04 yen (135.23), 0.8061 pounds (0.7955) and 1.5224 Swiss francs (1.5345).
The dollar stood at 99.18 yen (99.50) and 1.1184 Swiss francs (1.1289).
The pound was at 1.6883 dollars (1.7080).
On the London Bullion Market, the price of gold bounced to 924.05 dollars an ounce from 883.50 dollars late on Thursday. — AFP