High yielders cut gains amid fears of risks

Higher yielders such as the Australian dollar gave back small gains on the yen and dollar as caution set in before an EU assessment of Greece's fiscal plan and key US jobs data at the end of the week.

The Australian dollar, which fell on Tuesday after the central bank unexpectedly opted not to raise interest rates, was 0.3 per cent lower yesterday at $0.8850 after ticking higher earlier.

Against the yen it was unchanged yesterday at 79.99 yen but up from a six-week low of 79set on Monday.

The New Zealand dollar fell 0.4 per cent to $0.7107, after touching $0.7135. But it was up from the week's one-month low just below $0.7000, and flat at ¥64.25. Short-term speculators had earlier picked up bargains in beaten-down growth-linked currencies such as the Aussie following strong US earnings and improved housing data, which helped lift appetite for slightly riskier assets, market players said. But reports that two Chinese banks had called back some loans reminded the market of jitters over Chinese tightening, and the potential impact on growth, and provided short-term players with an excuse to close their positions.

South Korea's won led gains among Asian currencies as regional stocks extended a global rally. The won climbed for a second day against the dollar on expectations a global economic recovery will boost demand for emerging-market assets.

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