Currencies 12/26/2006

Currencies
Yen Falls to Two-Month Low Against Dollar; BOJ May Freeze Borrowing Costs The yen dropped to the lowest against the dollar since October and approached a record low versus the euro after government reports on inflation and spending suggested the Bank of Japan will keep interest rates on hold next month.
Bernanke, Trichet, Fukui May Fail King's `Boring' Test on Rates Next Year Bank of England Governor Mervyn King says interest rates should be so predictable that investors view policy-making as ``boring.'' On the evidence of economists' forecasts for 2007, the world's central bankers may fail his test.
Americas
Brazil's Real, Local Bonds Strengthen After Economists Cut Rate Forecasts Brazilian real-denominated bonds gained after a central bank survey showed economists lowered their 2007 interest-rate forecast amid a slowdown in inflation.
Mexican Peso Steady, Bonds Fall on Expectations Central Bank to Hold Rates Mexican peso bonds declined on expectations the central bank may hold off from cutting interest rates next quarter as it waits for further signs inflation is slowing.
Yen May Fall to 12-Month Low Versus Dollar on Rate View, Gain Capital Says The yen may fall to a 12-month low against the dollar on speculation slowing economic growth in Japan may discourage the central bank from raising interest rates, according to Gain Capital Inc.
Europe
Israel Prime Minister Olmert Wins Backing of Coalition for the 2007 Budget Israeli Prime Minister Ehud Olmert won the backing of his coalition partners for the 2007 budget late yesterday, enabling voting on the spending package to begin in parliament.
Berlin Real Estate Market Turns Up as Foreign Investors Seize on Bargains Yngve Fredheim, a 60-year-old civil engineer from Norway, bought an apartment in Berlin's Prenzlauer Berg district last year for 300,000 euros ($385,000), or about 60 percent less than a comparable apartment back home in Oslo.
Asia
South Korean Won, Taiwan's Dollar Weaken on Concern Central Banks to Sell South Korea's won fell after a state- run research agency forecast economic growth will slow next year, spurring speculation the central bank may sell the currency to help increase exports.
India's Rupee Pares Gains on Speculation Central Bank to Help Exporters India's rupee pared gains on speculation state-owned banks, on behalf of the central bank, will sell the currency to curb rising imports.
China's Yuan Holds at Lowest in a Week as Yen, South Korean Won Decline The yuan held at a one-week low after some Asian currencies the People's Bank of China uses to manage its exchange rate weakened against the dollar.