Dollar near 8-yr high vs yen

0

TOKYO: The dollar was sitting around eight-year highs against the yen on Wednesday following upbeat US data, while the euro came under further selling pressure over growing fears Greece will default on its debt obligations.

Advertisements

In Tokyo, the greenback bought 123.08 yen, little changed from 123.09 yen in New York, where it passed the 123.30 yen level at one point, its highest since mid-2007.

Figures Tuesday that showed improvements in US consumer confidence, home sales and prices, and orders for core industrial goods pointed to a pick-up in growth in the world’s biggest economy after a weak first-quarter.

The latest results, along with comments Friday from Federal Reserve chief Janet Yellen that she expects to hike interest rates “at some point this year,” put talk of a rate increase back on the table—a plus for the dollar.

“Looking at Yellen’s comments from the end of last week, it seems like she’s determined to act this year,” said Yasuhiro Kaizaki, vice president for global markets at Sumitomo Mitsui Trust Bank.

“Until recently, I think people were only really buying the dollar against the euro, but it’s clear now that you can buy the dollar against many different currencies.”

The dollar has gained 8.4 percent in the past six months against a basket of developed-nation currencies tracked by Bloomberg as expectations for a rate rise build. That is despite struggling in recent weeks on the back of a string of weak data that had analysts suggesting a rate rise could be put back to the start of 2016.

“The Fed is approaching the hiking stage within this year,” Kei Katayama, who trades US bonds in Tokyo at Daiwa SB Investments, told Bloomberg News. “With Greece, geopolitical risk is increasing. The dollar is a safe haven.”

The euro bought $1.0889 and 134.03 yen, edging up from $1.0879 and 133.92 yen in US trade.

The long-running saga over Greece’s bailout reform continues to drag on the single currency, with Athens unable to reach an agreement with its creditors that will release much needed cash to help it avoid a default.

As a June 5 repayment deadline looms, the two sides have still not reached a deal that will unlock the last batch of bailout money. There are fears that a Greek default could see the country tumbling out of the eurozone, spooking global investors.

The common currency is sharply down from $1.1149 and 134.54 yen last week.
The dollar strengthened against other Asia-Pacific currencies.

It rose to Tw$30.68 from Tw$30.54 on Tuesday, to 64.08 Indian rupees from 63.74 rupees, to Sg$1.3501 from Sg$1.3457, and to 33.79 Thai baht from 33.63 baht.

The US unit also strengthened to 13,232.60 Indonesian rupiah from 13,190.00 rupiah, and to 1,107.94 South Korean won from 1,098.11.

The Australian dollar slipped to 77.49 US cents from 78.25 cents while the Chinese yuan bought 19.83 yen, up from 19.64 yen.

AFP

Share.
loading...
Loading...

Please follow our commenting guidelines.

Comments are closed.