Dollar gains in Asia as stocks steady
Friday, 10 October 2008
TOKYO, Oct 9 (AFP): The dollar rose against the euro and the yen in Asia today as stocks in the region showed signs of stabilising after recent steep falls, dealers said.
The dollar was changing hands at 99.99 yen in Tokyo morning trade, up from 99.42 yen in New York late Wednesday, when it hit a six-month low. The euro fell to 1.3583 dollars from 1.3663 while rising to 136.11 yen from 135.85.
Major central banks in the United States, Europe and Canada cut interest rates Wednesday in a joint effort to ease a global credit squeeze, but markets reacted cautiously to the move.
"The concerted rate cut had no immediate impact on markets but the dollar firmed this morning as stock prices briefly turned higher," said Kenichi Yumoto, vice president of forex at Societe Generale.
Japanese share prices edged higher in early trade, a day after the biggest loss in two decades.
But dealers said that there was growing concern that, despite the measures being taken, the financial crisis is showing little sign of abating.
"It's too early to say whether the unprecedented and bold policy response to the financial crisis will unfreeze credit markets," NAB Capital analyst John Kyriakopoulos wrote in a note to clients.
"Concerns over a global recession are unlikely to wane, although the global co-ordinated interest rate cut might just reduce the chance of a deep global recession," he added.
The Japanese yen has been the main beneficiary of the financial turmoil as speculators rush to exit risky positions funded with cheap Japanese credit.
The dollar was resisting sharp falls but "the market mood is very dark," Yumoto at Societe Generale said.
"There are no high expectations for the upcoming G7 meeting," of finance ministers and central bankers from Britain, Canada, France, Germany, Italy, Japan and the United States in Washington Friday, he said.
"No-one can come up with a scenario that would reverse the current sentiment," he said.
There were growing fears that the financial crisis is taking a heavy toll on the major economies.
Japan's government announced early today that core machinery orders, a key gauge of corporate capital spending, slumped 14.5 per cent in August from the previous month, the fastest drop in more than two years.
The dollar was changing hands at 99.99 yen in Tokyo morning trade, up from 99.42 yen in New York late Wednesday, when it hit a six-month low. The euro fell to 1.3583 dollars from 1.3663 while rising to 136.11 yen from 135.85.
Major central banks in the United States, Europe and Canada cut interest rates Wednesday in a joint effort to ease a global credit squeeze, but markets reacted cautiously to the move.
"The concerted rate cut had no immediate impact on markets but the dollar firmed this morning as stock prices briefly turned higher," said Kenichi Yumoto, vice president of forex at Societe Generale.
Japanese share prices edged higher in early trade, a day after the biggest loss in two decades.
But dealers said that there was growing concern that, despite the measures being taken, the financial crisis is showing little sign of abating.
"It's too early to say whether the unprecedented and bold policy response to the financial crisis will unfreeze credit markets," NAB Capital analyst John Kyriakopoulos wrote in a note to clients.
"Concerns over a global recession are unlikely to wane, although the global co-ordinated interest rate cut might just reduce the chance of a deep global recession," he added.
The Japanese yen has been the main beneficiary of the financial turmoil as speculators rush to exit risky positions funded with cheap Japanese credit.
The dollar was resisting sharp falls but "the market mood is very dark," Yumoto at Societe Generale said.
"There are no high expectations for the upcoming G7 meeting," of finance ministers and central bankers from Britain, Canada, France, Germany, Italy, Japan and the United States in Washington Friday, he said.
"No-one can come up with a scenario that would reverse the current sentiment," he said.
There were growing fears that the financial crisis is taking a heavy toll on the major economies.
Japan's government announced early today that core machinery orders, a key gauge of corporate capital spending, slumped 14.5 per cent in August from the previous month, the fastest drop in more than two years.