Dollar mixed as market waits key US data
Thursday, 6 September 2007
TOKYO, Sept 5 (AFP): The dollar was mixed against major rivals in Asian trade today as investors waited nervously for key US reports to see how recent credit market turmoil has affected the economy, dealers said.
They said currency markets were also gearing up for interest rate decisions in the eurozone and Britain on Thursday, although no changes are expected this week in light of recent financial market volatility.
The dollar dropped to 115.85 yen in Tokyo afternoon trade from 116.34 in New York late on Tuesday.
The euro fell to 1.3582 dollars from 1.3607 and to 157.28 yen from 158.29.
The Japanese currency gained from renewed risk aversion linked to jitters about the fallout from the problems in subprime mortgages to risky borrowers, dealers said.
Markets were roiled in August by rising US home loan defaults, hitting banks and funds that own "subprime" mortgage- backed securities and prompting fears of a liquidity shortage.
Amid concern about the impact of the US housing woes on the overall economy, investors were waiting anxiously for the Federal Reserve's "Beige Book" economic report later Wednesday and a key monthly jobs report on Friday.
Many market players expect the Fed to lower interest rates from the current level of 5.25 per cent at its September 18 meeting.
Fed Chairman Ben Bernanke, who has appeared wary of using an interest rate cut to calm distressed markets, in a speech last Friday said he was prepared to take action if the financial turmoil was starting to slow growth.
But some analysts believe the Fed will want to make clear to investors that it is not responsible for rescuing those who have made reckless investment decisions, and could therefore put off a rate cut until later in the year.
Currency markets will also focus on interest rate decisions in the 13-nation eurozone and Britain on Thursday, dealers said.
The dollar rose to 1.5272 Singapore dollars from 1.5229 a day earlier, to 9,407.5 Indonesian rupiah from 9,385 and to 32.60 Thai baht from 32.33.
The greenback eased to 938.05 South Korean won from 938.40 while holding steady at 33.03 Taiwan dollars and at 46.70 Philippine pesos.
They said currency markets were also gearing up for interest rate decisions in the eurozone and Britain on Thursday, although no changes are expected this week in light of recent financial market volatility.
The dollar dropped to 115.85 yen in Tokyo afternoon trade from 116.34 in New York late on Tuesday.
The euro fell to 1.3582 dollars from 1.3607 and to 157.28 yen from 158.29.
The Japanese currency gained from renewed risk aversion linked to jitters about the fallout from the problems in subprime mortgages to risky borrowers, dealers said.
Markets were roiled in August by rising US home loan defaults, hitting banks and funds that own "subprime" mortgage- backed securities and prompting fears of a liquidity shortage.
Amid concern about the impact of the US housing woes on the overall economy, investors were waiting anxiously for the Federal Reserve's "Beige Book" economic report later Wednesday and a key monthly jobs report on Friday.
Many market players expect the Fed to lower interest rates from the current level of 5.25 per cent at its September 18 meeting.
Fed Chairman Ben Bernanke, who has appeared wary of using an interest rate cut to calm distressed markets, in a speech last Friday said he was prepared to take action if the financial turmoil was starting to slow growth.
But some analysts believe the Fed will want to make clear to investors that it is not responsible for rescuing those who have made reckless investment decisions, and could therefore put off a rate cut until later in the year.
Currency markets will also focus on interest rate decisions in the 13-nation eurozone and Britain on Thursday, dealers said.
The dollar rose to 1.5272 Singapore dollars from 1.5229 a day earlier, to 9,407.5 Indonesian rupiah from 9,385 and to 32.60 Thai baht from 32.33.
The greenback eased to 938.05 South Korean won from 938.40 while holding steady at 33.03 Taiwan dollars and at 46.70 Philippine pesos.