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FOREX-Yen pressured, Canada dlr at 22-mth high

Published 04/21/2010, 04:22 AM
Updated 04/21/2010, 04:32 AM
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* Yen near week's lows with risk appetite positive

* Apple Inc earnings boost risk sentiment

* Canada dollar at 22-mth high vs US dollar on rate outlook

* Euro steady as Athens talks with EU/IMF begin

(Adds quote, detail, changes dateline, previous TOKYO)

By Neal Armstrong

LONDON, April 21 (Reuters) - The yen hovered near the week's lows on Wednesday as strong U.S. earnings and gains in global equities fed a rebound in risk appetite, while the Canadian dollar climbed to its highest level in nearly two years.

Apple Inc posted earnings on Tuesday that far exceeded expectations, sending its shares up more than 5 percent to an all-time high, following strong results from Goldman Sachs.

"Risk appetite is generally positive and equities are up. The Apple results really helped," said Adam Cole, Global Head of FX Strategy at RBC Capital Markets.

This kept the low yielding Japanese yen on the back foot, with real-money accounts said to be keen to buy yen crosses on dips.

At 0750 GMT, the dollar was trading up around 0.1 percent versus the yen at 93.30 yen. The euro traded around flat against the yen at 125.30 yen. It rose as high as 125.64 yen the previous day.

The Canadian dollar traded with gains of around 0.4 percent at 93.80 yen.

The Canadian currency has risen about 11 percent against the yen since starting to rally in late February.

It strengthened broadly on Tuesday after the Bank of Canada signalled an interest rate rise may come as early as June.

Early European trade on Wednesday pushed it to a 22-month high of 0.9931 versus the U.S. dollar.

"The Canadian dollar is rallying after the BoC dropped its conditional commitment not to move on rates. We have a near-term target versus the U.S. dollar of C$0.9800 and expect that to be reached pretty quickly," RBC's Cole added.

ATHENS TALKS

The euro hovered close to a two-week low after Greek borrowing costs hit a 12-year high on Tuesday as Athens prepared to launch talks on a European union/International Monetary Fund bailout package aimed at rescuing Greece from a debt crisis.

Ten days of talks begin on Wednesday on the belt-tightening measures Greece must take until 2012, the European Commission said, paving the way for the swift payout of up to 30 billion euros of euro zone emergency aid if Athens asks for it.

EURO LOSSES

The euro traded with slight losses on the day at $1.3420 after dropping to its lowest level since April 8 in Asia at $1.3399. But further losses were limited as traders said a lot of the bad news had already been factored in.

"The expectation that Greece will soon have to make use of the Eurogroup and IMF rescue package is almost completely priced in. The current news flow is not questioning this assumption." analysts at Commerzbank said in a note.

Traders reported good demand on order boards from $1.3380, placed ahead of a reported $1.3350 option barrier being defended by an Asian sovereign account.

The Australian dollar stayed firm at $0.9320, a day after the release of hawkish minutes from the Reserve Bank of Australia's last board meeting. The central bank raised the cash rate by 25 basis points to 4.25 percent and signalled more rate hikes in coming months.

(Additional reporting by Kaori Kaneko , editing by Nigel Stephenson)

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