Dollar steady in Asia
Tuesday, 11 December 2007
TOKYO, Dec 10 (AFP): The dollar was steady in Asian trade today as traders sat on their hands on the eve of a key US interest rate decision, dealers said.
The dollar was at 111.66 yen in Tokyo afternoon trade compared with 111.65 in New York late Friday.
The euro edged down to 1.4645 dollars from 1.4656 and was stable at 163.51 yen after 163.53.
Market players were holding their breath ahead of a Federal Reserve meeting Tuesday when the US central bank is expected to cut its key interest rate by at least 25 basis points from the current level of 4.5 per cent, dealers said.
It would be the third cut to the benchmark fed funds rate since September in response to the credit squeeze that has roiled world markets in recent months.
But speculation that the Fed might slash the rate by a hefty 50 basis points due to looming fears of a recession receded following better-than-expected US employment figures, dealers said.
Although investors generally prefer currencies with higher yields, market watchers believe the dollar could benefit if a Fed rate cut helps to shore up confidence in the US economy.
Analysts said, however, that another US rate cut would be unlikely to erase worries over the US subprime mortgage crisis with banks still reluctant to lend to each other.
The dollar was at 111.66 yen in Tokyo afternoon trade compared with 111.65 in New York late Friday.
The euro edged down to 1.4645 dollars from 1.4656 and was stable at 163.51 yen after 163.53.
Market players were holding their breath ahead of a Federal Reserve meeting Tuesday when the US central bank is expected to cut its key interest rate by at least 25 basis points from the current level of 4.5 per cent, dealers said.
It would be the third cut to the benchmark fed funds rate since September in response to the credit squeeze that has roiled world markets in recent months.
But speculation that the Fed might slash the rate by a hefty 50 basis points due to looming fears of a recession receded following better-than-expected US employment figures, dealers said.
Although investors generally prefer currencies with higher yields, market watchers believe the dollar could benefit if a Fed rate cut helps to shore up confidence in the US economy.
Analysts said, however, that another US rate cut would be unlikely to erase worries over the US subprime mortgage crisis with banks still reluctant to lend to each other.