Euro Gains Versus Dollar, Yen as Credit Suisse Posts a Profit

The euro rose against the dollar and the yen afterCredit Suisse Group AG, the biggest Swiss bank by market value, said it returned to profit in the first quarter, spurring demand for higher-yielding currencies.

The yen fell against the Australian and New Zealand dollars as Asian stocks advanced after Credit Suisse’s earnings exceeded estimates. The euro also advanced before European reports today that economists say will show manufacturing and service industries improved for a second month, adding to evidence the euro area’s recession is easing.


“Asian stock markets, a gauge for risk aversion, rebounded following Credit Suisse’s earnings news,” Tomohiro Nishida, a foreign-exchange dealer at Chuo Mitsui Trust & Banking Co. in Tokyo. “The bounce back of stocks triggered buying of the euro and other higher-yielding currencies.”

The euro climbed to $1.3037 as of 7:48 a.m. in London from $1.3005 yesterday in New York after falling as low as $1.2980. It advanced to 127.72 yen from 127.48, after earlier weakening to 126.80. Japan’s currency was little changed at 97.967 per dollar from 98.01.

Japan’s Nikkei 225 Stock Average rose 1.4 percent and the MSCI Asia-Pacific Index of regional shares climbed 1.4 percent.

Credit Suisse announced a net income of 2 billion Swiss francs ($1.7 billion), compared with a 2.15 billion-franc loss a year earlier, the Zurich-based bank said in a statement. Earnings were twice the median estimate of analysts surveyed by Bloomberg News.

‘Highly Volatile’

The yen earlier gained versus all of the 16 most-traded currencies on speculation the U.S. government will uncover more losses at the nation’s banks when it releases results of its so- called stress tests on May 4

“Highly volatile price action is expected before the results of the ongoing stress test are announced,” said Yoshifumi Suzuki, a foreign-exchange dealer at Hachijuni Bank Ltd. in Tokyo. “If concerns about the credit crunch eases, then people may favor such currencies as the Aussie.”

Australia’s dollar rose to 69.48 yen from 69.14 yen yesterday, reversing a loss of as much as 0.7 percent. The New Zealand dollar climbed to 54.79 yen from 54.44 yesterday.

Japan’s currency had approached a three-week high against the dollar afterMorgan Stanley, the fifth-biggest U.S. bank by assets, posted a larger-than-expected loss yesterday, and Wells Fargo & Co. Chief Financial OfficerHoward Atkins said “credit may not have turned yet.” Bank of America Corp. also increased its loan-loss reserves this week.

Profit Trends

“While there is some improvement in profit trends at U.S. banks, it is far from clear if this positive flow will be sustained,” said Masashi Hashimoto, senior analyst in Tokyo at Bank of Tokyo-Mitsubishi UFJ Ltd., a unit of Japan’s largest lender.

The euro rose against 13 of the 16 most-active currencies before Markit Economics releases its composite index of Europe’s manufacturing and service industries. The index, which is based on a survey of purchasing managers, rose to 38.9 in April from 38.3 the previous month, according to a Bloomberg News survey.

“Most people are looking for a better PMI number,” said Lee Wai Tuck, a currency strategist at Forecast Pte in Singapore. “Signs that the euro-zone’s recession isn’t worsening would probably be supportive of the euro.”