The yen rose across the board on Friday as a pullback in Wall Street shares and a drop in oil prices negated upbeat U.S. consumer sentiment, rekindling safe-haven demand for the Japanese currency.

When rumors of the Swiss central bank again intervening to drive down the value of the Swiss franc hit the world’s currency trading desks late last week, it underscored just how hard global governments are fighting against the strong currencies that can derail exports while also blunting consumer demand at home.

Geithner sends the dollar on a thrill ride…  A failed UK gilt auction…  China set to recover first…  AUD and NZD rally again… And Now… Today’s Pfennig!

U.S. data sparks flight to dollar…  Oil slips, traders fret over demand outlook…  Traders await ECB rate decision on Thursday.

US data may wake up the markets… Toyota reports a loss…  NZD falls, AUD gains… Will the Rupee shine in 2009?… And Now… Today’s Pfennig!

John Crooks says the US dollar is one of the few bullish currencies for 2009. Investors can profit by going long on dollar ETFs, or shorting other currency ETFs. But to make really huge returns, John recommends using options and investing in the exotic currency markets.

Paulson says no to automakers…  Currencies trade in a tight range…  Richard Russell on a Wednesday!  TIC Flows improve… And Now… Today’s Pfennig!

The dollar’s decline against the Euro and other major currencies has dominated the financial news. In the past two years the Euro has gained about 25 percent against the dollar and the Wan about 18 percent since 2005.

The US dollar looks set to make a second straight monthly advance against the yen and euro as gains in stocks showed traders are cautiously optimistic the economy may not slide into recession after all.

“The idea that the Fed will continue to cut rates has been completely put to bed and the market is now flirting with the idea of a rate hike. That has given the dollar a boost,” said Alan Ruskin, head of international currency strategy at RBS Greenwich Capital Markets in Connecticut, in Bloomberg. More from that story:

 Analysts are seeing many similarities between the scenarios leading to the collapse of the Yen carry trade back in 1998 and what is occurring now. Should those investors and funds reliant on currency trading be paying closer attention?