Dollar static in Asia after recent turbulence
Thursday, 23 August 2007
TOKYO, Aug 22 (AFP): The dollar hardly moved against the yen in Asian trade today as market players took a breather after recent turbulence over the troubled US housing sector, traders said.
The dollar changed hands at 114.37 yen in late morning trade in Tokyo, easing slightly from 114.40 in New York late Tuesday.
The euro was trading at 1.3472 dollars here, firming slightly from 1.3463 in New York Tuesday when it had earlier risen to as high as 1.3521 on speculation the US Federal Reserve would soon cut its key interest rate.
The single European unit was quoted at 154.07 yen, edging down from 154.10.
The market is "relatively calm as overnight trading was quiet, except for some volatility in London," said Kenichi Yumoto, vice president at the foreign exchange sales and trading department of Societe Generale in Tokyo.
"It is too early to declare that the market has stabilised but the turmoil is passing for now," he said.
The Bank of Japan (BoJ) started a two-day policy board meeting Wednesday but the market consensus is that the central bank will keep rates on hold given the credit woes, Yumoto said.
Although a quarter-point hike would not significantly impact the Japanese economy the central bank is likely to err on the side of caution and leave rates at 0.50 per cent, by far the lowest of any major economy.
Last Friday, the US Federal Reserve unexpectedly slashed its discount rate for commercial banks a half point to 5.75 per cent, further fueling talk of a fed funds rate cut.
The Fed's move put a temporary halt to the rapid unwinding of the yen carry trade, a risky strategy where investors borrow in low-yielding currencies such as the yen to invest in higher- yielding assets elsewhere.
The dollar fell to 943.40 South Korean won from 943.55 on Tuesday, to 32.65 Thai baht from 32.90, to 46.70 Philippine pesos from 46.80, and to 9,425 Indonesian rupiah from 9,435.
But it rose to 1.5273 Singapore dollars from 1.5259, and to 32.99 Taiwan dollars from 32.91.
The dollar changed hands at 114.37 yen in late morning trade in Tokyo, easing slightly from 114.40 in New York late Tuesday.
The euro was trading at 1.3472 dollars here, firming slightly from 1.3463 in New York Tuesday when it had earlier risen to as high as 1.3521 on speculation the US Federal Reserve would soon cut its key interest rate.
The single European unit was quoted at 154.07 yen, edging down from 154.10.
The market is "relatively calm as overnight trading was quiet, except for some volatility in London," said Kenichi Yumoto, vice president at the foreign exchange sales and trading department of Societe Generale in Tokyo.
"It is too early to declare that the market has stabilised but the turmoil is passing for now," he said.
The Bank of Japan (BoJ) started a two-day policy board meeting Wednesday but the market consensus is that the central bank will keep rates on hold given the credit woes, Yumoto said.
Although a quarter-point hike would not significantly impact the Japanese economy the central bank is likely to err on the side of caution and leave rates at 0.50 per cent, by far the lowest of any major economy.
Last Friday, the US Federal Reserve unexpectedly slashed its discount rate for commercial banks a half point to 5.75 per cent, further fueling talk of a fed funds rate cut.
The Fed's move put a temporary halt to the rapid unwinding of the yen carry trade, a risky strategy where investors borrow in low-yielding currencies such as the yen to invest in higher- yielding assets elsewhere.
The dollar fell to 943.40 South Korean won from 943.55 on Tuesday, to 32.65 Thai baht from 32.90, to 46.70 Philippine pesos from 46.80, and to 9,425 Indonesian rupiah from 9,435.
But it rose to 1.5273 Singapore dollars from 1.5259, and to 32.99 Taiwan dollars from 32.91.