NEWS / Foreign Exchange

China hikes rate

China raised interest rates for the third time in nearly a year over the weekend, stirring worries the move could further hit rattled equity markets. China's latest rate increase may take a toll on investor's appetite for risk, which has helped the yen as market players unwind carry trades that use low-yielding currencies like the yen as a cheap source of funds to buy higher-yielding currencies.

Weaker Yen

The yen gave up some initial gains as the Nikkei share average climbed 1.2 %, shrugging off China's latest attempt to clamp down on robust credit and investment growth.

Crude below $57

U.S. crude futures fell below USD 57 on Monday, extending last weeks' decline as concerns over the health of the U.S. economy continued to dominate the market

Oil prices settled 44 cents lower at USD 57.11 a barrel on Friday, after dipping to a low of USD 56.17 earlier on -- the lowest level since late January for the April contract.

Barclays in merger

Barclays is expected to announce today that it is in preliminary talks on an ??81 billion merger with ABN Amro in a move that is likely to spark a bidding war for the troubled Dutch bank.

Confirmation of the discussions will put pressure on European rivals that are understood to have made informal approaches to ABN Amro in recent weeks.

SKK revalued

The European Union said on Friday that the central rate of the Slovak koruna within the ERM exchange rate mechanism II had been revalued by 8.5 %.

It said the new rate was one euro equals 35.4424 koruna.