Dollar weaker in Asia despite central bank credit plan
Friday, 14 December 2007
TOKYO, Dec 13 (AFP): The dollar slipped against other major currencies in Asian trade today amid uncertainty about how effective a central bank plan to ease a global credit crunch will be, dealers said.
The dollar was also pressured by growing expectations that the Federal Reserve will cut interest rates again to prop up the world's largest economy in the face of a housing slump, they said.
The euro rose to 1.4716 dollars in Tokyo afternoon trade from 1.4702 dollars in New York late Wednesday.
The dollar fell to 111.81 yen from 112.21, while the euro dropped to 164.49 yen from 165.10.
The greenback had shot up against the yen in overseas trade on news of a joint initiative by the central banks of the United States, the eurozone, Britain, Canada and Switzerland to jointly boost liquidity.
But the rise was short-lived amid lingering concerns over a fallout from the US housing housing slump, dealers said.
"The dollar recovered somewhat as fears of a credit crunch subsided for now," said Hironori Sakurai, forex dealer at Hachijuni Bank.
"But it still lacks the momentum to surge ahead with market players waiting for fourth-quarter results from major US banks starting this week," he said.
Selling of the greenback by Japanese exporters also capped the currency's rise, he added.
While the Federal Reserve's plan to cooperate with the other central banks to pump more money into the banking system was seen as positive, some analysts questioned its long-term effectiveness in resolving the credit crisis.
The dollar was also pressured by growing expectations that the Federal Reserve will cut interest rates again to prop up the world's largest economy in the face of a housing slump, they said.
The euro rose to 1.4716 dollars in Tokyo afternoon trade from 1.4702 dollars in New York late Wednesday.
The dollar fell to 111.81 yen from 112.21, while the euro dropped to 164.49 yen from 165.10.
The greenback had shot up against the yen in overseas trade on news of a joint initiative by the central banks of the United States, the eurozone, Britain, Canada and Switzerland to jointly boost liquidity.
But the rise was short-lived amid lingering concerns over a fallout from the US housing housing slump, dealers said.
"The dollar recovered somewhat as fears of a credit crunch subsided for now," said Hironori Sakurai, forex dealer at Hachijuni Bank.
"But it still lacks the momentum to surge ahead with market players waiting for fourth-quarter results from major US banks starting this week," he said.
Selling of the greenback by Japanese exporters also capped the currency's rise, he added.
While the Federal Reserve's plan to cooperate with the other central banks to pump more money into the banking system was seen as positive, some analysts questioned its long-term effectiveness in resolving the credit crisis.