Dollar hits two-month low against yen on US concerns
Wednesday, 25 July 2007
TOKYO, July 24 (AFP): The dollar hit a two-month low against the yen and traded close to its record trough versus the euro in Asian trade today as the health of the US economy remained the market's biggest worry, dealers said.
The dollar stood at 120.54 yen in Tokyo afternoon trade, down from 120.99 in New York late Monday.
The euro was at 1.3823 dollars, up from 1.3811 dollars late Monday, when it had earlier hit an all-time high of 1.3845. The euro fell to 166.49 yen from 167.13.
Worries about problems in the US sub-prime mortgage sector - loans to homeowners with patchy credit histories-continued to weigh on sentiment, said Nobuo Kihara in forex sales at BNP Paribas.
The dollar has come under heavy pressure recently due to concerns that a weakening US housing market could drag down consumer demand and thereby hamper momentum in the economy as a whole.
The sub-prime concerns look set to dominate at least until Wednesday, when the Federal Reserve's Beige Book economic report and existing home sales data are due for release.
Dealers said the housing jitters may be affecting the 'carry trade' as investors grow more risk averse.
Carry trade is a risky but popular practice of borrowing money in countries with low interest rates such as Japan and investing it in countries with high interest rates such as Australia or Britain.
Japan's financial markets were monitoring political developments ahead of Sunday's upper house election, with polls showing Prime Minister Shinzo Abe facing heavy losses that could prompt calls for his resignation.
The dollar was mixed against Asian currencies, easing to 32.75 Taiwan dollars from 32.80 Monday, to 913.90 South Korean won from 915.30, to 1.5040 Singapore dollars from 1.5105 and to 9,050 Indonesian rupiah from 9,080.
It rose to 45.05 Philippine pesos from 44.86 and to 30.175 Thai baht from 29.552.
The dollar stood at 120.54 yen in Tokyo afternoon trade, down from 120.99 in New York late Monday.
The euro was at 1.3823 dollars, up from 1.3811 dollars late Monday, when it had earlier hit an all-time high of 1.3845. The euro fell to 166.49 yen from 167.13.
Worries about problems in the US sub-prime mortgage sector - loans to homeowners with patchy credit histories-continued to weigh on sentiment, said Nobuo Kihara in forex sales at BNP Paribas.
The dollar has come under heavy pressure recently due to concerns that a weakening US housing market could drag down consumer demand and thereby hamper momentum in the economy as a whole.
The sub-prime concerns look set to dominate at least until Wednesday, when the Federal Reserve's Beige Book economic report and existing home sales data are due for release.
Dealers said the housing jitters may be affecting the 'carry trade' as investors grow more risk averse.
Carry trade is a risky but popular practice of borrowing money in countries with low interest rates such as Japan and investing it in countries with high interest rates such as Australia or Britain.
Japan's financial markets were monitoring political developments ahead of Sunday's upper house election, with polls showing Prime Minister Shinzo Abe facing heavy losses that could prompt calls for his resignation.
The dollar was mixed against Asian currencies, easing to 32.75 Taiwan dollars from 32.80 Monday, to 913.90 South Korean won from 915.30, to 1.5040 Singapore dollars from 1.5105 and to 9,050 Indonesian rupiah from 9,080.
It rose to 45.05 Philippine pesos from 44.86 and to 30.175 Thai baht from 29.552.