Dollar eases back in Asia
Thursday, 13 March 2008
TOKYO, March 12 (AFP): The dollar eased back against other major currencies in Asian trade today as an overnight rally sparked by central bank action to bolster ailing credit markets ran out of steam, dealers said.
The euro was quoted at 1.5376 dollars in Tokyo afternoon trade, up slightly from 1.5333 in New York late Tuesday.
The dollar fell to 102.93 yen from 103.42, pressured by selling by Japanese exporters, dealers said. The euro bought 158.25 yen, down from 158.63.
The greenback rallied in US trade, pulling the euro down from a record high of 1.5495 dollars, on news that the Federal Reserve and other central banks were pumping hundreds of billions of dollars into stressed financial markets.
But the US currency turned lower again amid concerns that the move will not completely resolve credit market problems.
"The action eased pressure on the dollar," said Satoru Ogasawara, forex strategist at Credit Suisse, "but we don't consider it a solution that could eradicate the problems of the financial system."
Investors generally prefer the currencies of countries that have higher interest rates as they can reap higher yields.
The Fed is likely to eventually cut its base federal funds rate to 2.0 per cent, or even lower, from the current rate of 3.0 per cent, Ogasawara said.
The central bank action was the latest in a series of steps to help get credit flowing in the global financial system, which has been hit by concerns about market turmoil linked to a collapse in US real estate securities.
Markets were also monitoring a political row in Tokyo over who will become the next head of the Bank of Japan, after opposition lawmakers voted down the government's candidate for the post just a week before it falls vacant.
The dollar also fell to 41.15 Philippine pesos in late Asian trade from 41.27 a day earlier, to 1.3854 Singapore dollars from 1.3876 and to 9,145 Indonesian rupiah from 9,215.
The greenback was steady at 30.58 Taiwan dollars and 31.56 Thai baht.
The dollar was changing hands at 970.20 South Korean won against 970.10 after rising to a two-year high of 980.60 briefly Tuesday.
The euro was quoted at 1.5376 dollars in Tokyo afternoon trade, up slightly from 1.5333 in New York late Tuesday.
The dollar fell to 102.93 yen from 103.42, pressured by selling by Japanese exporters, dealers said. The euro bought 158.25 yen, down from 158.63.
The greenback rallied in US trade, pulling the euro down from a record high of 1.5495 dollars, on news that the Federal Reserve and other central banks were pumping hundreds of billions of dollars into stressed financial markets.
But the US currency turned lower again amid concerns that the move will not completely resolve credit market problems.
"The action eased pressure on the dollar," said Satoru Ogasawara, forex strategist at Credit Suisse, "but we don't consider it a solution that could eradicate the problems of the financial system."
Investors generally prefer the currencies of countries that have higher interest rates as they can reap higher yields.
The Fed is likely to eventually cut its base federal funds rate to 2.0 per cent, or even lower, from the current rate of 3.0 per cent, Ogasawara said.
The central bank action was the latest in a series of steps to help get credit flowing in the global financial system, which has been hit by concerns about market turmoil linked to a collapse in US real estate securities.
Markets were also monitoring a political row in Tokyo over who will become the next head of the Bank of Japan, after opposition lawmakers voted down the government's candidate for the post just a week before it falls vacant.
The dollar also fell to 41.15 Philippine pesos in late Asian trade from 41.27 a day earlier, to 1.3854 Singapore dollars from 1.3876 and to 9,145 Indonesian rupiah from 9,215.
The greenback was steady at 30.58 Taiwan dollars and 31.56 Thai baht.
The dollar was changing hands at 970.20 South Korean won against 970.10 after rising to a two-year high of 980.60 briefly Tuesday.