• Dollar extends gains after US growth data, China rate cut

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    TOKYO: The dollar extended its gains in Asia on Monday as better-than-expected revised US economic growth data and an interest rate cut by China boosted confidence, analysts said.

    In Tokyo, the dollar fetched 119.87 yen, compared with 119.63 yen in New York and well up from 119.17 yen in Tokyo earlier Friday.

    The euro slipped to $1.1174 and 133.91 yen from $1.1195 and 133.93 yen in US trade.

    “China’s rate cuts improved risk sentiment while data showing Japanese corporate profits rose significantly supported buying Japanese equities, leading to the dollar’s gain against the yen,” Nobuo Ichikawa, chief manager of foreign exchange financial products trading at Mitsubishi UFJ Trust and Banking, told Bloomberg News.

    The People’s Bank of China on Saturday cut interest rates by 25 basis points, citing “historically low inflation” among the factors behind its decision.

    The move is the latest by authorities aimed at lifting the world’s number two economy after it grew in 2014 at its slowest pace since 1990. The PBoC has also cut the percentage of funds banks must hold in reserve to boost lending.

    The dollar edged higher Friday, booking its eighth consecutive month of gains after the latest government estimate of US growth showed the economy grew 2.2 percent in the last quarter of 2014, slower than the 2.6 percent first estimated but not as slow as the 2.1 percent forecast.

    The figures come as investors look to the US jobs data on Friday, after Fed chief Janet Yellen, during two days of Congressional testimony last week, threw cold water on an interest rate hike before June.

    The euro won a measure of support as inflation data improved slightly in key eurozone economies, while German lawmakers approved a four-month bailout extension for Greece, clearing a key hurdle to keeping the new government in Athens financed and avoid a default.

    Dealers are now awaiting Thursday’s European Central Bank monetary policy meeting, with President Mario Draghi expected to provide details about its asset-purchase programme.

    AFP

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