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TOKYO: The dollar was steady in Asian trade on Friday as the market
turned cautious ahead of the release of US retail sales data,
helping the yen to recoup early losses, dealers said.
The dollar stood at 117.22 yen in Tokyo
afternoon trade, little changed from 117.27 yen in New York late
Thursday.
It rose to 1.4649 Singapore dollars from 1.4642
a day earlier, to 31.51 Thai baht from 31.42, and to 9060.00
Indonesian rupiah from 9,092.50.
It fell to 43.83 Philippine peso from 44.05 and
to 916.00 South Korean won from 916.40, while holding steady at
32.58 Taiwan dollars.
The euro slipped to $1.4187 after $1.4195 while
easing to 166.26 yen from 166.48.
The market was expecting the US retail sales
data, due later Friday, to show another rise, which could encourage
the Federal Reserve to keep interest rates steady when policymakers
meet at the end of this month, dealers said.
“The certainty behind a rate cut in October
has been significantly reduced,” said Thomas Lam, treasury
economist at United Overseas Bank in Singapore. “There is a low
likelihood that the Fed will move interest rates.”
Players locked in some of Thursday’s gains,
which were sparked by speculation that the European Central Bank may
lift its benchmark interest rate one more time between now and the
end of the year, dealers said.
ECB president Jean-Claude Trichet reiterated
that economic growth in the eurozone remained robust and that
inflation was subject to upside risks.
The yen had come under pressure in early trade
amid signs that players were stepping up carry trades that involve
selling low-return currencies for high-yielding ones.
“Market players are paying renewed attention
to interest rate gaps and opting to take risks . . . in view of
easing credit fears and recovering stock prices,” said Resona Bank
currency analyst Nobuaki Tani.
The Bank of Japan left on Thursday its key
interest rate on hold at 0.50 percent, opting to wait for clearer
evidence that the recent turmoil on global financial markets has
fully subsided.
The BoJ decision to leave rates on hold
“likely emboldened carry traders,” noted Barclays Capital
currency analysts.
But they said there was a “possibility of a
return to risk aversion if US banks earning reports come out weaker
than expected in the coming weeks.”
--AFP
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