Dollar set for weekly drop on speculation fed will keep easing
Sunday, 27 December 2009
TOKYO, Dec 26 (Bloomberg): The dollar was poised to end three consecutive weeks of gains against the euro on speculation the Federal Reserve will maintain stimulus measures to secure the US economy's recovery.
The greenback traded near the lowest level in one week against the 16-nation euro before reports forecast to show a slide in US business activity and a rebound in initial jobless claims. The yen was set to break a two-week advance against the euro after a government report showed Japan's consumer prices slid in November, backing expectations the Bank of Japan will keep interest rates near zero.
"Speculation about an early exit from credit easing in the US may weaken if incoming data confirm a patchy recovery," said Keiji Matsumoto, a strategist in Tokyo at Nikko Cordial Securities Inc. "It looks to be premature to conclude that the dollar carry-trade will come to a full end."
The dollar was at $1.4390 per euro at 4:33 p.m. in Tokyo from $1.4338 a week ago and $1.4380 yesterday in New York. It appreciated to $1.4218 on Dec. 22, the strongest level since Sept. 4, and fell back to $1.4418 yesterday, the lowest since Dec. 17. The dollar lost 0.4 per cent this week following a 1.9 per cent advance in the previous week. The dollar traded at 91.45 yen from 91.54 yesterday. It rose 1.1 per cent this week. The euro was at 131.65 yen from 131.63 in New York. It gained 1.5 per cent this week following a 0.4 per cent decline.
The greenback traded near the lowest level in one week against the 16-nation euro before reports forecast to show a slide in US business activity and a rebound in initial jobless claims. The yen was set to break a two-week advance against the euro after a government report showed Japan's consumer prices slid in November, backing expectations the Bank of Japan will keep interest rates near zero.
"Speculation about an early exit from credit easing in the US may weaken if incoming data confirm a patchy recovery," said Keiji Matsumoto, a strategist in Tokyo at Nikko Cordial Securities Inc. "It looks to be premature to conclude that the dollar carry-trade will come to a full end."
The dollar was at $1.4390 per euro at 4:33 p.m. in Tokyo from $1.4338 a week ago and $1.4380 yesterday in New York. It appreciated to $1.4218 on Dec. 22, the strongest level since Sept. 4, and fell back to $1.4418 yesterday, the lowest since Dec. 17. The dollar lost 0.4 per cent this week following a 1.9 per cent advance in the previous week. The dollar traded at 91.45 yen from 91.54 yesterday. It rose 1.1 per cent this week. The euro was at 131.65 yen from 131.63 in New York. It gained 1.5 per cent this week following a 0.4 per cent decline.