Dollar mixed in Asia with eyes on Fed
Thursday, 25 October 2007
TOKYO, Oct 24 (AFP): The dollar traded mixed in Asian trade today, giving up early gains as traders waited for key US housing data ahead of next week's Federal Reserve meeting, dealers said.
The greenback initially firmed from recent falls as speculative players took profits in the foreign exchange market following a continued rebound on Wall Street and an easing of crude oil prices, they said.
But dollar-buying sentiment was shortlived with the US unit slipping back by mid-afternoon.
"The general trend is that of a weaker dollar," said Yosuke Hosokawa, head of forex division at Chuo Mitsui Trust Bank.
The dollar fell to 114.44 yen in Tokyo afternoon trade from 114.79 in New York late Tuesday.
The euro slipped to 1.4252 dollars from 1.4261 and to 163.10 yen from 163.73.
Demand also increased for carry trades, in which investors use the low- costing yen to fund higher-yielding assets elsewhere, Hosokawa said.
Among currencies from nations with high-interest rates, the Australian dollar rose to 103.05 yen from 101.49 and the New Zealand dollar firmed to 86.83 yen from 85.58.
The dollar received support from the latest comments by former Federal Reserve chairman Alan Greenspan playing down the chances of the US economy going into recession, NAB Capital strategist John Kyriakopoulos said.
But the dollar's rise was capped as the market waited ahead of a Federal Open Market Committee meeting starting next Tuesday which is expected to cut interest rates, dealers said.
Investors have already priced in a rate cut, with some expecting the Fed to lower its key fed funds rate for the second straight session by a large 0.50 percentage points from the current 4.75 per cent.
The Fed's hefty cut last month helped calm financial markets, which were distressed by a US housing slump in which borrowers with shaky credit histories defaulted on their loans.
The dollar was mixed against other Asian currencies.
It rose to 1.4625 Singapore dollars from 1.4657 a day earlier, to 917.85 South Korean won from 917.60 and to 9,150.0 Indonesian rupiah from 9,125.0.
But it fell to 32.550 Taiwan dollars from 32.581 and to 44.07 Philippine pesos from 44.10.
The greenback initially firmed from recent falls as speculative players took profits in the foreign exchange market following a continued rebound on Wall Street and an easing of crude oil prices, they said.
But dollar-buying sentiment was shortlived with the US unit slipping back by mid-afternoon.
"The general trend is that of a weaker dollar," said Yosuke Hosokawa, head of forex division at Chuo Mitsui Trust Bank.
The dollar fell to 114.44 yen in Tokyo afternoon trade from 114.79 in New York late Tuesday.
The euro slipped to 1.4252 dollars from 1.4261 and to 163.10 yen from 163.73.
Demand also increased for carry trades, in which investors use the low- costing yen to fund higher-yielding assets elsewhere, Hosokawa said.
Among currencies from nations with high-interest rates, the Australian dollar rose to 103.05 yen from 101.49 and the New Zealand dollar firmed to 86.83 yen from 85.58.
The dollar received support from the latest comments by former Federal Reserve chairman Alan Greenspan playing down the chances of the US economy going into recession, NAB Capital strategist John Kyriakopoulos said.
But the dollar's rise was capped as the market waited ahead of a Federal Open Market Committee meeting starting next Tuesday which is expected to cut interest rates, dealers said.
Investors have already priced in a rate cut, with some expecting the Fed to lower its key fed funds rate for the second straight session by a large 0.50 percentage points from the current 4.75 per cent.
The Fed's hefty cut last month helped calm financial markets, which were distressed by a US housing slump in which borrowers with shaky credit histories defaulted on their loans.
The dollar was mixed against other Asian currencies.
It rose to 1.4625 Singapore dollars from 1.4657 a day earlier, to 917.85 South Korean won from 917.60 and to 9,150.0 Indonesian rupiah from 9,125.0.
But it fell to 32.550 Taiwan dollars from 32.581 and to 44.07 Philippine pesos from 44.10.