Dollar mixed in Asia on Fed easing signs
TOKYO – The dollar was mixed in Asian trade on Monday with the unit weakening against the yen after US Federal Reserve chief Ben Bernanke hinted at further easing measures to boost the world’s top economy.
The greenback bought 78.21 yen in Tokyo morning trade, from 78.31 yen in New York late Friday.
The euro fetched $1.2562 and 98.24 yen, from $1.2576 and 98.51 yen in US trade ahead of a European Central Bank (ECB) meeting this week.
Dollar-selling continued in Asia after traders pushed the unit lower in New York on Friday following Bernanke’s keynote speech at a central banker summit in Jackson Hole, Wyoming.
Bernanke pointed to a stagnant US labour market as “a grave concern” and signalled he would push for easing measures – which would tend to weigh on the dollar – when the Fed’s policy committee meets later this month.
“In the current market sentiment, it’s difficult to support the dollar against the yen,” said Teppei Ino, currency analyst at the Bank of Tokyo Mitsubishi UFJ.
“There won’t be any surprise if the dollar temporarily falls below 78 yen,” Ino added.
Traders have repeatedly flocked to the Japanese currency as a safe-haven unit amid turmoil in the eurozone and an unsteady US economic recovery.
But Tokyo warned that the yen was overvalued and did not reflect the state of the lumbering Japanese economy, the world’s third biggest.
The euro traded in a tight range as markets look to the ECB’s policy meeting on Thursday.
Bank chief Mario Draghi will look to head off German-led resistance to the bank’s anti-crisis measures, which include a possible restart to a bond-buying programme aimed at cutting borrowing costs for crisis-hit nations.
Germany, Europe’s biggest economy, has warned against the measures to prop up struggling nations, saying it could let them avoid painful austerity cuts necessary to put their public finances in order.
“Since the euro has rebounded moderately for the past weeks, it may face selling pressure soon,” Ino said.
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