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Broadgate: Market News 30/3

30 March 2012

Oil advanced in New York, heading for a second quarterly gain, as investors speculated that sanctions on Iran will tighten and that yesterday’s decline, the biggest this year, was exaggerated.

Crude rose for the first time in three days after the 2.5 percent drop, the most since December. For the week, prices are lower after U.S. stockpiles climbed to the highest level since August and Western countries discussed tapping emergency reserves. A technical indicator signaled prices may have fallen too far, and U.S. lawmakers introduced a bill seeking to expand sanctions on Iran.

The euro rose toward a one-month high on prospects European finance ministers will agree to increase rescue funds at a two-day meeting starting today.

The 17-nation euro was poised for its biggest quarterly gain versus the yen in 11 years before data forecast to show German retail sales increased. The yen strengthened against most of its 16 major peers after data showed Japanese consumer prices unexpectedly rose, reducing the case for further Bank of Japan (8301) easing.

The currency touched a three-week high against the dollar amid speculation Japanese companies are repatriating overseas earnings before the fiscal year ends tomorrow.

The yen briefly jumped to a three-week high against the dollar on Friday as speculators bought the currency, triggering stop losses, but a lack of expected strong follow-through buying by businesses saw the yen edge back.

Short-term players had hoped repatriation flows from Japanese exporters would boost the yen further, but most Tokyo companies have already ended their currency hedging, traders said, suggesting end-of-business-year demand for the yen is fading.

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