CURRENCY ASIA
Dollar recovers some ground in Asia
Agence France-Presse
First Posted 11:59:00 11/21/2008
Filed Under: Economy and Business and Finance, Foreign Exchange Markets
TOKYO -- The dollar regained some lost ground in Asian trade Friday, supported by safe-haven flows as stock markets tumbled and fears grew of a deep global recession.
The dollar edged up to 94.19 yen in Tokyo morning trade from 93.82 in New York late Thursday. The euro slipped to $1.2447 from $1.2458 but rose to 117.24 yen from 116.89.
The dollar and the yen remained supported as investors looked for safe havens amid the renewed turmoil on world markets.
"There is little doubt that the US economy looks to be entering fully-fledged recession," warned NAB Capital economist David de Garis in Sydney.
"Poor market sentiment was not helped by mixed messages from Congress about whether there would be further official support for the US auto industry," he added, as US lawmakers rejected giving aid to the Big Three -- General Motors, Chrysler, and Ford -- unless they showed a viable business plan.
Bad economic news from the US hit market sentiment, after Wall Street's Dow Jones index sank to the lowest level in five-and-a-half years.
The US Labor Department reported that initial claims for unemployment benefits shot up to a 16-year high last week.
Federal Reserve officials in minutes released earlier this week forecast that the US employment rate would jump to as high as 8.0 percent by the end of 2009, up from 6.5 percent in October.
Traders were waiting for an interest rate decision from the Bank of Japan, three weeks after the central bank cut its super-low interest rates for the first time in seven years to try to pump up the recession-hit economy.
Analysts see little chance of another rate cut this week from the current level of just 0.3 percent after warnings from the central bank chief about the risks of very low borrowing costs.
The British pound stayed near to a recent six-year low against the dollar, trading at $1.4760, up from 1.4719 in New York.
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