Dollar steady in Asian trade with all eyes on Fed
Friday, 29 June 2007
TOKYO, June 28 (AFP): The dollar was little changed in Asian trade today as players sat on their hands ahead of a US interest rate decision, dealers said.
The dollar edged up to 122.92 yen in Tokyo afternoon trade from 122.86 yen late Wednesday in New York.
The euro firmed to 1.3460 dollars after 1.3453 and to 165.42 yen from 165.32.
All eyes were on the US Federal Reserve's two-day monetary policy meeting, which wraps up later Thursday, dealers said.
The US central bank is expected to leave US interest rates on hold at 5.25 per cent but the market will look for clues in the Fed's accompanying statement about the outlook for US borrowing costs.
The Fed has consistently highlighted inflation dangers while playing down the risks of an economic slump.
Market views are currently divided on whether the next US interest rate move will be up or down, said Hiroshi Sakurai, analyst at Mizuho Investors Securities.
Overnight in New York, the yen firmed against the other main currencies as jitters in global financial markets prompted traders to scale back the so-called carry trade, analysts said.
Carry trades are when investors borrow money in countries with low interest rates, such as Japan, to invest in countries with higher returns, such as Britain, Australia or the United States.
Japanese industrial output data released Thursday had a limited impact on trading, dealers said.
Japan's industrial output fell 0.4 per cent in May from the previous month, defying market expectations for an increase.
The dollar eased to 926.50 South Korean won from 927.30, to 1.5357 Singapore dollars from 1.5382, to 9,067 Indonesian rupiah from 9,105 and to 46.38 Philippine pesos from 46.51.
The dollar edged up to 122.92 yen in Tokyo afternoon trade from 122.86 yen late Wednesday in New York.
The euro firmed to 1.3460 dollars after 1.3453 and to 165.42 yen from 165.32.
All eyes were on the US Federal Reserve's two-day monetary policy meeting, which wraps up later Thursday, dealers said.
The US central bank is expected to leave US interest rates on hold at 5.25 per cent but the market will look for clues in the Fed's accompanying statement about the outlook for US borrowing costs.
The Fed has consistently highlighted inflation dangers while playing down the risks of an economic slump.
Market views are currently divided on whether the next US interest rate move will be up or down, said Hiroshi Sakurai, analyst at Mizuho Investors Securities.
Overnight in New York, the yen firmed against the other main currencies as jitters in global financial markets prompted traders to scale back the so-called carry trade, analysts said.
Carry trades are when investors borrow money in countries with low interest rates, such as Japan, to invest in countries with higher returns, such as Britain, Australia or the United States.
Japanese industrial output data released Thursday had a limited impact on trading, dealers said.
Japan's industrial output fell 0.4 per cent in May from the previous month, defying market expectations for an increase.
The dollar eased to 926.50 South Korean won from 927.30, to 1.5357 Singapore dollars from 1.5382, to 9,067 Indonesian rupiah from 9,105 and to 46.38 Philippine pesos from 46.51.