China export slump increase demand for dollar dan yen

The dollar and the yen strengthened after a Chinese government report showed exports slid by a record last month, reviving demand for the two currencies as a refuge from the financial turmoil.

The U.S. and Japanese currencies gained versus higher yielders such as the Australian dollar after China’s customs bureau said the trade surplus narrowed to the least since February 2006, adding to concern the global recession will deepen. The euro ended a three-day gain versus the yen on speculation European Central Bank council member Erkki Liikanen will signal policy makers may cut interest rates further.

The dollar rose to $1.2652 per euro from $1.2682 late in New York yesterday. The U.S. currency traded at 98.47 yen from 98.67 yen. The yen advanced to 124.56 per euro from 125.13 yen.

Australia’s dollar dropped to 64.20 U.S. cents from 64.59 cents late yesterday. China’s trade surplus narrowed to $4.8 billion in February. Exports tumbled 25.7 percent from a year earlier and imports fell 24.1 percent.