Dollar softer in Asia on higher risk appetite
Friday, 13 November 2009
TOKYO, Nov 12 (AFP): The dollar lost ground in Asian trade Thursday as investors continued to buy riskier assets due to mounting hopes for a global economic recovery.
The euro rose to 1.5004 dollars in Tokyo midday trade from 1.4978 in New York late Wednesday, and to 134.76 yen from 134.58. The dollar slipped to 89.82 yen from 89.87.
The greenback's direction "remains firmly downwards as risk appetite continues to improve and the dollar's status as a funding currency remains unaltered," Calyon analyst Mitul Kotecha said.
Investors have been taking advantage of the low level of US interest rates to borrow cheap credit there to invest in higher-yielding assets elsewhere.
The Australian dollar, a beneficiary of this so-called carry trade, struck a fresh 15-month high of 93.54 US cents on expectations that a recovering global economic outlook will boost demand for Australian commodity exports.
Market optimism was supported by surprisingly strong jobs data in Australia, which created 24,500 jobs in October, fuelling speculation the country's central bank may raise rates for a third time by the year's end.
The weak US dollar supported gold prices, which touched a record high of 1,121 dollars an ounce Thursday in Hong Kong.
A weaker US currency is making the precious metal more affordable to people buying with other currencies and also prompting central banks and investors to diversify their foreign exchange holdings out of the ailing greenback.
The dollar also fell against regional Asian currencies such as the Korean won and the Singapore dollar.
The greenback's weakness has caused concern among Asia's export-led economies, prompting several central banks in the region to intervene to buy the US currency in recent weeks.
The euro rose to 1.5004 dollars in Tokyo midday trade from 1.4978 in New York late Wednesday, and to 134.76 yen from 134.58. The dollar slipped to 89.82 yen from 89.87.
The greenback's direction "remains firmly downwards as risk appetite continues to improve and the dollar's status as a funding currency remains unaltered," Calyon analyst Mitul Kotecha said.
Investors have been taking advantage of the low level of US interest rates to borrow cheap credit there to invest in higher-yielding assets elsewhere.
The Australian dollar, a beneficiary of this so-called carry trade, struck a fresh 15-month high of 93.54 US cents on expectations that a recovering global economic outlook will boost demand for Australian commodity exports.
Market optimism was supported by surprisingly strong jobs data in Australia, which created 24,500 jobs in October, fuelling speculation the country's central bank may raise rates for a third time by the year's end.
The weak US dollar supported gold prices, which touched a record high of 1,121 dollars an ounce Thursday in Hong Kong.
A weaker US currency is making the precious metal more affordable to people buying with other currencies and also prompting central banks and investors to diversify their foreign exchange holdings out of the ailing greenback.
The dollar also fell against regional Asian currencies such as the Korean won and the Singapore dollar.
The greenback's weakness has caused concern among Asia's export-led economies, prompting several central banks in the region to intervene to buy the US currency in recent weeks.