European focus: USD reached a weekly high versus yen [E]

USD versus the yen and euro almost reached a weekly high after North
Korea fired missiles over the Sea of Japan, ignoring calls by countries
including Japan, the U.S. and China.
The dollar also gained against the South Korean won, Taiwan dollar and
14 other major currencies as intensity increased in Asian region. Japan
will consider every type of sanctions". It bothered investors and led
to bullish sentiments on USD, as "safe-heaven" currency. Korea launched
five missiles today, including a long-range missile Tapodong 2 which
can reach territory of the USA, U.S. officials said.
The euro also declined before a press conference on interest rates by
European Central Bank President Jean-Claude Trichet and the U.S. monthly
employment report.
The euro appreciated almost 2% versus the dollar in the past four
sessions on indications the ECB would outpace the Federal Reserve. It is
expected Trichet will signal tomorrow borrowing costs hike in August.
However, if the U.S. employment report will be strong it would back the
case for the Fed to keep raising rates again.
Traders are ``taking some risk off the table before the ECB decision,''
said Adam Cole, RBC Capital Markets. ``The risk is that Trichet isn't
as hawkish about a rate hike in August as markets expect.''
The euro stayed lower after a private report showed services industries
in the euro region advanced the most in 6-years. Remind, that
manufacturing report showed the fastest growth since August 2000.