The dollar slumped below 90 yen for the first time in 13 years after the U.S. Senate rejected a $14 billion bailout for General Motors Corp. and Chrysler LLC. The U.S. currency headed for a sixth week of declines versus the yen as the automakers failed to obtain the funds they need to survive until next year. The yen rose against all the major currencies as Finance Minister Shoichi Nakagawa told reporters in Tokyo today Japan isn’t considering intervening in currency markets now. “We’re headed toward 80,” said Bilal Hafeez, the global head of currency strategy in London at Deutsche Bank AG, the world’s biggest foreign-exchange trader. “The dollar’s status as a safe-haven currency is being challenged.” The dollar weakened to 88.53 yen, the lowest level since August 1995, before trading at 90.35 at 7:12 a.m. in New York, from 91.45 yesterday. The euro fell 1.4 percent to 120.39 yen from 122.09 and 0.2 percent to $1.3323 from $1.3352 as investors pared holdings of higher-yielding currencies. The dollar fell 19 percent against the yen this year, the most since 1987, as $986 billion of credit-market losses sparked a seizure in money markets and threw the U.S. economy into a recession. The dollar dropped 2.6 percent against the yen this week and 4.6 percent against the euro. “The yen is doing well not just because of risk aversion,” said David Woo, global head of foreign-exchange strategy at Barclays Capital in London. “One could make the case that Japanese automakers are going to be the big winners from this bailout coming apart.”
