Dollar falls against yen on financial jitters
Wednesday, 20 August 2008
TOKYO, Aug 19 (AFP): The dollar slipped against the yen in Asian trade today on fresh worries about the health of US mortgage giants, dealers said.
But the greenback rose against the euro on fears of a deterioration in German business sentiment.
The dollar eased to 110.00 yen in Tokyo afternoon trade from 110.09 in New York late Monday. The euro fell to 1.4679 dollars from 1.4696 and to 161.51 yen from 161.83.
Currency markets took their cue from a slump on Wall Street after a report that mortgage finance giants Fannie Mae and Freddie Mac were in need of a government bailout, dealers said.
Another report that US investment bank Lehman Brothers would post a loss of 1.8 billion dollars for the third quarter added to market worries that the credit crunch is far from over.
The yen tends to benefit from jitters on the financial market because it is often used to fund risky trades.
But some market watchers predicted the yen's rebound would be short-lived.
Markets were waiting for a German business sentiment survey due out later in the day that was expected to reflect worsening conditions in the eurozone's biggest economy, dealers said.
The dollar last week jumped to a six-month high against the euro and its strongest level since January against the yen on worries that the fallout from the US financial crisis was spreading to other major economies.
Traders showed little reaction to a decision by the Bank of Japan to leave its key interest rate on hold at 0.5 per cent as it downgraded its assessment of Asia's largest economy, predicting continued "sluggish" growth.
"The grimmer view may prompt some players to start speculating (about) a higher possibility of a rate cut down the road," said Tohru Sasaki, chief foreign-exchange strategist at JP Morgan Chase in Tokyo.
Against regional Asian currencies, the dollar edged up to 1,049.00 South Korean won from 1,044.55 on Monday, to 33.95 Thai baht from 33.84, to 1.4142 Singapore dollars from 1.4118 and to 45.45 Philippine pesos from 45.23.
But the greenback slipped to 9,185 Indonesian rupiah from 9,210 and to 31.36 Taiwan dollars from 31.41.
But the greenback rose against the euro on fears of a deterioration in German business sentiment.
The dollar eased to 110.00 yen in Tokyo afternoon trade from 110.09 in New York late Monday. The euro fell to 1.4679 dollars from 1.4696 and to 161.51 yen from 161.83.
Currency markets took their cue from a slump on Wall Street after a report that mortgage finance giants Fannie Mae and Freddie Mac were in need of a government bailout, dealers said.
Another report that US investment bank Lehman Brothers would post a loss of 1.8 billion dollars for the third quarter added to market worries that the credit crunch is far from over.
The yen tends to benefit from jitters on the financial market because it is often used to fund risky trades.
But some market watchers predicted the yen's rebound would be short-lived.
Markets were waiting for a German business sentiment survey due out later in the day that was expected to reflect worsening conditions in the eurozone's biggest economy, dealers said.
The dollar last week jumped to a six-month high against the euro and its strongest level since January against the yen on worries that the fallout from the US financial crisis was spreading to other major economies.
Traders showed little reaction to a decision by the Bank of Japan to leave its key interest rate on hold at 0.5 per cent as it downgraded its assessment of Asia's largest economy, predicting continued "sluggish" growth.
"The grimmer view may prompt some players to start speculating (about) a higher possibility of a rate cut down the road," said Tohru Sasaki, chief foreign-exchange strategist at JP Morgan Chase in Tokyo.
Against regional Asian currencies, the dollar edged up to 1,049.00 South Korean won from 1,044.55 on Monday, to 33.95 Thai baht from 33.84, to 1.4142 Singapore dollars from 1.4118 and to 45.45 Philippine pesos from 45.23.
But the greenback slipped to 9,185 Indonesian rupiah from 9,210 and to 31.36 Taiwan dollars from 31.41.