Dollar down against euro, yen amid auto uncertainty
Sunday, 14 December 2008
NEW YORK, Dec 13 (AFP): The US dollar was down marginally against the euro and yen Friday after plunging to a 13-year low against the Japanese currency amid uncertainty over a bailout plan for beleagured American automakers.
The euro rose to 1.3380 dollars at 2200 GMT Friday from 1.3350 dollars late Thursday in New York.
The dollar also lost ground to 91.06 yen from 91.46 yen Thursday.
The greenback had plunged to 88.40 yen at one point, the lowest level since August 1995, in Asian trading Friday after the US Senate rejected a rescue plan for ailing American automakers.
The single European currency was also down against the surging Japanese currency, falling to 121.82 yen from 122.10 yen.
The pound fell to 1.4953 dollars on Friday in New York from 1.5010 dollars a day earlier while the dollar fell to 1.1769 Swiss francs from 1.1842.
Experts said the market was concerned about a possible intervention by the Japanese authorities to ease the yen's appreciation, especially if it broke the 90 mark.
"The bigger concern amongst traders though is what will happen if USD/JPY falls below 90," said Terri Belkas, a currency strategist of Forex Capital Markets.
Japan's finance minister Shoichi Nakagawa said Friday the government had no immediate plans to intervene.
He described the dollar's fall below 90 yen for the first time since 1995 as 'shocking'.
"Therefore, despite the bounce off the lows, we expect yen to remain bid especially if it becomes increasing obvious to traders that the US automakers are heading for bankruptcy protection, putting their massive debt obligations at risk to their many creditors," said Boris Schlossberg, director of currency research at Global Forex Trading.
There is also speculation that the United States could next week slash rates by as much as 0.75 percentage points to 0.25 per cent, which would be even lower than Japan's rock-bottom official borrowing costs at 0.3 per cent.
The euro rose to 1.3380 dollars at 2200 GMT Friday from 1.3350 dollars late Thursday in New York.
The dollar also lost ground to 91.06 yen from 91.46 yen Thursday.
The greenback had plunged to 88.40 yen at one point, the lowest level since August 1995, in Asian trading Friday after the US Senate rejected a rescue plan for ailing American automakers.
The single European currency was also down against the surging Japanese currency, falling to 121.82 yen from 122.10 yen.
The pound fell to 1.4953 dollars on Friday in New York from 1.5010 dollars a day earlier while the dollar fell to 1.1769 Swiss francs from 1.1842.
Experts said the market was concerned about a possible intervention by the Japanese authorities to ease the yen's appreciation, especially if it broke the 90 mark.
"The bigger concern amongst traders though is what will happen if USD/JPY falls below 90," said Terri Belkas, a currency strategist of Forex Capital Markets.
Japan's finance minister Shoichi Nakagawa said Friday the government had no immediate plans to intervene.
He described the dollar's fall below 90 yen for the first time since 1995 as 'shocking'.
"Therefore, despite the bounce off the lows, we expect yen to remain bid especially if it becomes increasing obvious to traders that the US automakers are heading for bankruptcy protection, putting their massive debt obligations at risk to their many creditors," said Boris Schlossberg, director of currency research at Global Forex Trading.
There is also speculation that the United States could next week slash rates by as much as 0.75 percentage points to 0.25 per cent, which would be even lower than Japan's rock-bottom official borrowing costs at 0.3 per cent.