Dollar surges in Asia trade after G7 meet

0

TOKYO: The dollar broke through the 102-yen level in Asian trading on Monday, after Tokyo sidestepped criticism over the unit’s steep decline at a weekend Group of Seven (G7) meeting in Britain.

Speculation that the US Federal Reserve could be the first among major central banks to roll back its huge monetary easing policy also boosted the dollar, as data pointed to a brighter outlook for the world’s biggest economy.

Markets are keeping a close eye on US retail sales later in the day and a batch of Chinese economic data, dealers said.

“The general theme is that the US dollar is dominating proceedings,” said Tim Waterer, senior trader at CMC Markets in Sydney.

Advertisements
canonx

The greenback bought 102.04 yen in morning Tokyo trade, against 101.62 yen in New York City on Friday. It settled back to 101.85 yen later on Monday afternoon.

The euro also gained on the Japanese currency at 132.16 yen from 132.03 yen in US
trading, while it weakened against the dollar to $1.2974 from $1.2993.

Traders cheered the outcome of the G7 talks, which began a day after the dollar cracked the 100-yen level for the first time in four years.

Finance officials vowed not to weaken their currencies, but did not directly criticize Japan for the yen’s rapid fall from the Bank of Japan’s aggressive easing policy.

Japanese media have interpreted the G7’s relative silence on the yen as tacit approval of
Tokyo’s policy which had previously stirred criticism, particularly from Europe, that it could set off a global currency war.

In other forex trading on Monday, the Australian dollar slipped below parity with the strengthening greenback for the first time in about a year on fears that the mining-powered economy was slowing.

A weekend article in the Wall Street Journal said that the Fed had come up with a strategy to wind down its $85-billion per month bond-buying program, which had placed downward pressure on the dollar.

The story “is making the rounds of the market and investors are giving it a careful reading”, Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo, told Dow Jones Newswires.

Saito added that Fed Chairman Ben Bernanke “skipping the G7 prompted some speculation in the market that the Fed might be seriously thinking about the near-term kick-off for the exit.”

The dollar was stronger against other Asia-Pacific currencies.

It gained to 29.81 Thai baht from 29.62 baht on Friday, to Taiwan $29.86 from Tw$29.58, and to P41.17 from P41.13.

The greenback also gained to Singapore $1.2415 from Sg$1.2357, to 54.95 Indian rupees from 54.50, and to 9,743 Indonesian rupiah from 9,734 rupiah.

The Australian dollar changed hands at 99.89 US cents compared with $1.0084, while the Chinese yuan fetched 16.57 yen from 16.45 yen.

AFP

Share.
loading...
Loading...

Please follow our commenting guidelines.

Comments are closed.