Dollar weak, yen even weaker
Sunday, 17 June 2007
NEW YORK, June 16 (AFP): The dollar stumbled against the euro yesterday as US economic data dashed expectations for a rate hike, while the yen was hammered by the lack of a clear signal on rate moves by the Bank of Japan.
The euro rose to 1.3379 dollars at 2100 GMT, from 1.3310 dollars in New York late Thursday.
The dollar meanwhile jumped to 123.45 yen, up from 122.88 Thursday.
In late New York trade, the dollar stood at 1.2415 Swiss francs from 1.2461 Thursday.
The pound was being traded at 1.9767 dollars after 1.9696.
US economic figures, including those for core inflation, industrial production and consumer confidence, offset a stronger- than-expected headline inflation number and a strong Empire survey on manufacturing activity in the New York region.
US figures put headline inflation at 0.7 per cent in May, a bigger rise than the 0.6 per cent expected, while the more closely watched core rate rose by just 0.1 per cent, below forecasts for a slightly bigger 0.2 per cent rise.
Further data showed industrial output was flat in May, against expectations for a 0.2 per cent rise, while the University of Michigan's consumer sentiment index fell to 83.7 in June, well below forecasts for a reading of around 87.9.
Meanwhile, the yen was another major focus for currency markets, hitting a fresh record low against the euro yen and a four-and-a-half year low against the dollar of 123.66 yen.
The yen has been pressured recently by ongoing popularity for the carry trade-where investors borrow in low-yielding currencies such as the yen to invest in higher-yielding assets elsewhere.
Losses were extended however after Bank of Japan governor Toshihiko Fukui expressed little concern about the currency's weakness and gave no hints on the timing of any future interest rate rise.
The euro rose to 1.3379 dollars at 2100 GMT, from 1.3310 dollars in New York late Thursday.
The dollar meanwhile jumped to 123.45 yen, up from 122.88 Thursday.
In late New York trade, the dollar stood at 1.2415 Swiss francs from 1.2461 Thursday.
The pound was being traded at 1.9767 dollars after 1.9696.
US economic figures, including those for core inflation, industrial production and consumer confidence, offset a stronger- than-expected headline inflation number and a strong Empire survey on manufacturing activity in the New York region.
US figures put headline inflation at 0.7 per cent in May, a bigger rise than the 0.6 per cent expected, while the more closely watched core rate rose by just 0.1 per cent, below forecasts for a slightly bigger 0.2 per cent rise.
Further data showed industrial output was flat in May, against expectations for a 0.2 per cent rise, while the University of Michigan's consumer sentiment index fell to 83.7 in June, well below forecasts for a reading of around 87.9.
Meanwhile, the yen was another major focus for currency markets, hitting a fresh record low against the euro yen and a four-and-a-half year low against the dollar of 123.66 yen.
The yen has been pressured recently by ongoing popularity for the carry trade-where investors borrow in low-yielding currencies such as the yen to invest in higher-yielding assets elsewhere.
Losses were extended however after Bank of Japan governor Toshihiko Fukui expressed little concern about the currency's weakness and gave no hints on the timing of any future interest rate rise.