Dollar Broadly Slips But Gains Against Yen
The dollar slipped back slightly against most rivals during Asia trading hours Monday after last week’s gains, but it managed to notch another advance against the Japanese yen as traders parsed the latest comments from officials in Tokyo.
The ICE dollar index , which measures the greenback against a basket of six other currencies, traded at 82.770, down from 82.900 in late North American trading Friday.
The WSJ dollar index , which measures the greenback against a slightly wider basket, traded at 73.85, fractionally higher from 73.82 in late North American trading on Friday.
Against the yen , the dollar advanced to ¥96.17, up slightly from ¥96.08 at the end of last week.
On Friday, the yen neared a four-year low against the dollar, and Crédit Agricole foreign-exchange strategist Adam Myers expects further weakness for the Japanese currency going forward.
“There is no scope for Bank of Japan easing expectations to soften any time soon,” said Myers.
Specifically, the strategist cited comments from Prime Minister Shinzo Abe’s special adviser Koichi Hamada, who said a change to the central-bank law with respect to the nation’s current 2% inflation target should still be considered. Such a move could empower the government to push for a further loosening of policy.
“At the same time he stressed that a strong Japanese yen can be corrected by monetary policy. Such comments suggest that there is no change to officials’ aggressive policy stance,” said Myers.
“U.S. dollar/Japanese yen will continue to benefit from an aggressive Bank of Japan monetary policy stance in combination with improving U.S. growth prospects,” the strategist said.
On Friday, key jobs data from the U.S. exceeded economist expectations, as the country’s jobless rate fell to a 2008 low, supporting the dollar.
Still, while the U.S. currency gave back a fraction of those gains Monday, many of the losses against the top units were very small. The euro bought $1.3007, up marginally from $1.2999 late Friday, while the British pound traded at $1.4922, inching up from $1.4917 in late trading on Friday.
The Australian dollar moved fractionally lower to $1.0219, down from $1.0229 late last week.
Marketwach
