Dollar dips in Asia ahead of rate decisions
Tuesday, 5 August 2008
TOKYO, Aug 4 (AFP): The dollar was softer against the euro in Asia today ahead of interest rate decisions in the US and Europe, as central banks wrestle with weak economic growth and rising inflation, dealers said.
The euro rose to 1.5586 dollars in Tokyo afternoon trade from 1.5555 in New York late Friday, and to 167.82 yen from 167.52. The dollar was steady at 107.69 yen after 107.68.
Trade was quiet with the Federal Reserve, the European Central Bank (ECB) and the Bank of England all expected to leave borrowing costs on hold this week, said Yosuke Hosokawa, chief forex strategist at Chuo Mitsui Trust Bank.
The Fed is expected to leave its benchmark rate at 2.0 per cent Tuesday, saying that "while the economy is cooling there is still a need to remain vigilant on inflation," Hosokawa said.
The ECB is expected to keep official borrowing costs at 4.25 per cent Thursday as it battles to try to contain inflation without tipping the eurozone economy into recession, dealers said.
Australia's central bank meets Tuesday, with markets on alert for any signals that a rate cut could be on the cards due to worries about the health of the domestic economy and banking sector.
Traders were digesting Friday's data showing that the US economy shed 51,000 jobs in July, a seventh straight monthly loss, while unemployment hit a four-year high of 5.7 per cent.
But the closely watched report was not as bad as feared, as most economists had predicted 75,000 jobs would be lost.
In the eurozone, a survey showing lacklustre manufacturing activity stoked recession fears, dealers said.
Against Asian currencies, the dollar edged up to 1.3701 Singapore dollars from 1.3698 Friday, to 1,017.40 South Korean won from 1,014.15 and to 30.71 Taiwan dollars from 30.68.
It gained to 9,097.00 Indonesian rupiah from 9,092.50, to 44.47 Philippine pesos from 44.22 and to 33.54 Thai baht from 33.53.
The euro rose to 1.5586 dollars in Tokyo afternoon trade from 1.5555 in New York late Friday, and to 167.82 yen from 167.52. The dollar was steady at 107.69 yen after 107.68.
Trade was quiet with the Federal Reserve, the European Central Bank (ECB) and the Bank of England all expected to leave borrowing costs on hold this week, said Yosuke Hosokawa, chief forex strategist at Chuo Mitsui Trust Bank.
The Fed is expected to leave its benchmark rate at 2.0 per cent Tuesday, saying that "while the economy is cooling there is still a need to remain vigilant on inflation," Hosokawa said.
The ECB is expected to keep official borrowing costs at 4.25 per cent Thursday as it battles to try to contain inflation without tipping the eurozone economy into recession, dealers said.
Australia's central bank meets Tuesday, with markets on alert for any signals that a rate cut could be on the cards due to worries about the health of the domestic economy and banking sector.
Traders were digesting Friday's data showing that the US economy shed 51,000 jobs in July, a seventh straight monthly loss, while unemployment hit a four-year high of 5.7 per cent.
But the closely watched report was not as bad as feared, as most economists had predicted 75,000 jobs would be lost.
In the eurozone, a survey showing lacklustre manufacturing activity stoked recession fears, dealers said.
Against Asian currencies, the dollar edged up to 1.3701 Singapore dollars from 1.3698 Friday, to 1,017.40 South Korean won from 1,014.15 and to 30.71 Taiwan dollars from 30.68.
It gained to 9,097.00 Indonesian rupiah from 9,092.50, to 44.47 Philippine pesos from 44.22 and to 33.54 Thai baht from 33.53.