Currencies
The euro rose to a six month high against the dollar Friday when the U.S. employment report bolstered the view that the slowdown in the U.S. is more pronounced than in Europe. Now analysts think that not only will growth rates converge, but Europe may grow faster than the United States in coming months. Many analysts are forecasting growth rates of about 3 percent for the United States and the EMU this year. The current market perception that the EMU is more stable is boosting the region's currency.

This was the euro's sixth straight weekly gain against the dollar and seventh versus the yen, its longest streak against both. It rose as high as 95.94 U.S. cents in intra-day trading, the strongest since July 6. Against the yen, the euro rose to 111.68 yen from 109.97, near an 11 month high.

The yen fell to a 17 month low against the dollar and an 11 month low against the euro after a newspaper report triggered speculation that Japanese exporters will keep more of their earnings overseas to reap higher returns. Japan's currency has dropped since traders caught wind that Toyota Motor Corp., the world's third biggest automaker, will manage its overseas profits in local currencies. Traders took the report as a signal that Toyota will convert less of its overseas revenue into yen.

Recent data have confirmed that slowing external demand and equity market weakness are having an impact on the teetering economy. The Bank of Japan, in its latest monthly report, acknowledged that the economy is less buoyant than they thought just five months ago when they raised interest rates from near zero to 0.25 percent. Market concerns center around the banking sector in particular because of the sliding stock market and continuing bankruptcy problems.

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