Dollar weakens against euro in Asian trade
Friday, 16 November 2007
TOKYO, Nov 15 (AFP): The dollar softened against the euro in Asian trade today after better-than-expected growth in the eurozone contrasted with concerns about a slowdown in the United States, dealers said.
The euro climbed to 1.4674 dollars in Tokyo afternoon trade from 1.4645 in New York late Wednesday, edging closer to its record high of 1.4752 struck on November 9.
The single European currency also firmed to 163.38 yen from 162.98, while the dollar gained to 111.38 yen from 111.27.
The euro got a boost from robust third quarter eurozone growth figures, which showed a 0.7 per cent quarterly gain for a 2.6 per cent yearly rate.
"The EU figures were strong, even better than expected and this is keeping investors optimistic that interest rates there will at least be stable if not higher," said Daniel Chan, senior investment strategist for DBS Bank.
The dollar meanwhile has been under pressure recently as investors prefer countries where interest rates are moving higher or are already high.
Financial markets are still gripped by fears that more banks will report losses from the US subprime loan crisis, discouraging yen carry trades, where speculators borrow in Japan to invest in high-return assets overseas.
The dollar has floundered against many foreign currencies in recent months amid fears of a US economic slowdown and with the Federal Reserve cutting interest rates in a bid to underpin economic momentum.
The dollar sagged after US retail sales, a key driver of economic growth, showed a modest 0.2 per cent rise in October.
The euro climbed to 1.4674 dollars in Tokyo afternoon trade from 1.4645 in New York late Wednesday, edging closer to its record high of 1.4752 struck on November 9.
The single European currency also firmed to 163.38 yen from 162.98, while the dollar gained to 111.38 yen from 111.27.
The euro got a boost from robust third quarter eurozone growth figures, which showed a 0.7 per cent quarterly gain for a 2.6 per cent yearly rate.
"The EU figures were strong, even better than expected and this is keeping investors optimistic that interest rates there will at least be stable if not higher," said Daniel Chan, senior investment strategist for DBS Bank.
The dollar meanwhile has been under pressure recently as investors prefer countries where interest rates are moving higher or are already high.
Financial markets are still gripped by fears that more banks will report losses from the US subprime loan crisis, discouraging yen carry trades, where speculators borrow in Japan to invest in high-return assets overseas.
The dollar has floundered against many foreign currencies in recent months amid fears of a US economic slowdown and with the Federal Reserve cutting interest rates in a bid to underpin economic momentum.
The dollar sagged after US retail sales, a key driver of economic growth, showed a modest 0.2 per cent rise in October.