Dollar gains against yen
Thursday, 5 June 2008
TOKYO, June 4 (AFP): The dollar extended its gains against the yen in Asian trade today after Federal Reserve chairman Ben Bernanke said a weaker greenback was adding to US inflation pressures, dealers said.
They said the market had taken the rare remarks by the Fed chief on currencies as a signal that the US central bank will not be in a hurry to cut interest rates again as such a move would be likely to weigh on the dollar.
The dollar firmed to 105.21 yen in Tokyo afternoon trade from 105.08 in New York late Tuesday.
The euro was little changed at 1.5443 dollars but edged up to 162.40 yen from 162.36.
Bernanke told a conference in Barcelona, Spain that downward pressures on the dollar "have contributed to the unwelcome rise in import prices and consumer price inflation."
He said the Fed was "attentive to the implications of changes in the value of the dollar for inflation and inflation expectations."
"Comments on currencies from the Fed chairman are a very rare thing and surely had a supportive effect on the dollar," Tsutomu Soma, a senior trader at Okasan Securities, told Dow Jones Newswires.
"But now, positive economic indicators will have to back up the dollar or the impact will be wiped out soon," he added.
Yosuke Hosokawa, chief forex strategist at Chuo Mitsui Trust Bank, also said that it was unclear how long support from the comments would last because his remarks were fairly general.
The Fed next meets on June 24-25 when it is expected to keep rates on hold, having slashed borrowing costs to 2.00 per cent from 5.25 per cent in late 2007.
They said the market had taken the rare remarks by the Fed chief on currencies as a signal that the US central bank will not be in a hurry to cut interest rates again as such a move would be likely to weigh on the dollar.
The dollar firmed to 105.21 yen in Tokyo afternoon trade from 105.08 in New York late Tuesday.
The euro was little changed at 1.5443 dollars but edged up to 162.40 yen from 162.36.
Bernanke told a conference in Barcelona, Spain that downward pressures on the dollar "have contributed to the unwelcome rise in import prices and consumer price inflation."
He said the Fed was "attentive to the implications of changes in the value of the dollar for inflation and inflation expectations."
"Comments on currencies from the Fed chairman are a very rare thing and surely had a supportive effect on the dollar," Tsutomu Soma, a senior trader at Okasan Securities, told Dow Jones Newswires.
"But now, positive economic indicators will have to back up the dollar or the impact will be wiped out soon," he added.
Yosuke Hosokawa, chief forex strategist at Chuo Mitsui Trust Bank, also said that it was unclear how long support from the comments would last because his remarks were fairly general.
The Fed next meets on June 24-25 when it is expected to keep rates on hold, having slashed borrowing costs to 2.00 per cent from 5.25 per cent in late 2007.