The greenback rose against a basket of currencies except the Japanese yen after Russian Finance Minister, Alexei Kudrin, said following the Group of Eight meeting that it was too early to speak of an alternative to the world’s main reserve currency and his nation has full confidence in the U.S. currency. Besides Russian, Japanese Finance Minister Kaoru Yosano stated last Friday that the government’s confidence in U.S. debt is “unshakable” and will keep buying the securities. These boosted the dollar, easing concerns that major emerging market countries may diversify their reserves away from the greenback ahead of summit of leaders of Brazil, Russia, India and China, known as BRIC, in Russia on Tuesay.

Euro fell against the greenback after Kudrin firmed dollar’s role as the world’s main reserve. The report from U.K. Daily Telegraph on deepened credit crunch in Germany weighed on euro in Asian session. In addition, eurozone posted worse-than-expected employment data in the first quarter of 2009 (-0.8% versus the readings of –0.4% in the previous quarter). This weak employment figures combined with the much weaker-than-expected eurozone industrial production data came in last Friday further highlighted the depth of recession the region is facing. The single currency declined to as low as 1.3755 against the greenback in New York afternoon before stabilising.

The British pound fell against the dollar after the Confederation of British Industry (CBI) predicted that the nation will not have growth until 2010 and the Bank of England may need to print more money to boost growth. FTSE100 index of U.K. shares dropped 2.6%. Sterling tumbled to 1.6242 against the U.S. currency in New York afternoon before rebounding partly due to short-covering. Cross selling versus yen also weighed on the British pound with gbp/jpy fell fm 161.76 to 158.91.

The tumble in global stock markets discouraged investors from buying higher-yielding assets. The Japanese strengthened to as high as 97.59 against the dollar. The Australian and New Zealand dollars, two commodity-linked currencies, hit session lows of 0.7905 and 0.6278 versus the greenback respectively.

Data to be released on Thursday include Japan BoJ rate decision, Australia RBA board minutes, Switzerland industrial production, U.K. CPI and RPI, German Zew index, eurozone HICP and Zew survey, U.S. housing starts, U.S. PPI, housing starts, capacity utilization and industrial production.