|
|
|
| 10 April 2005 | Sunday | 30 Safar 1426 |
Dollar eases against euro, yen in technical trading
With trading winding down, dealers said the market’s focus is also shifting to US economic data next week, including trade numbers for February, due on Tuesday.
Once we traded through that $1.2860 level, we went 80 points in 20 minutes and it was relentless, said Michael Jansen, strategist at National Australia Bank in New York. Trading was mostly technical with some squaring of long dollar positions ahead of the weekend, he said.
Late in New York trade, the euro rose to $1.2931, up 0.6 per cent from late Thursday, after hitting lows near $1.2800.
Losses against the euro prompted dollar selling against other major currencies.
Against the yen, the US currency was down at 108.27 yen. The dollar fell about 0.8 per cent against the Swiss franc to 1.1979 francs.
Sterling, meanwhile, climbed to $1.8852.
Unexpectedly strong machinery orders data in Japan had supported the yen against the euro, but gains dissipated after the single European currency rallied against the dollar.
Everyone was long dollars and it’s Friday, it’s thin. Maybe in Europe people went home early because of the (Pope’s) funeral, and there was a rumour of a bomb on a plane, so the dollar was sold aggressively, said John McCarthy, director of foreign exchange trading at ING Capital Markets LLC in New York.
McCarthy was referring to news on Friday that an Italian Air Force fighter forced an executive jet with a suspected bomb on board to land near Rome, where world leaders had gathered for the funeral of Pope John Paul. No bomb was discovered.
As the New York session drew to a close, more investors took positions with a view toward February’s US trade numbers as any widening in the deficit could cut short the dollar’s recovery, analysts said. The report will be released Tuesday.
The gap between imports and exports widened to $59 billion in February compared with $58.27 billion in January, according to the median forecast from a Reuters poll of 35 economists.
US asset flows data for February will be released on Friday. The latest Reuters poll shows the median estimate for February US net capital inflows of $65 billion compared with $91 billion in January.
Earlier on Friday, softer oil prices and comments from Federal Reserve officials hinting that US interest rates may need to rise more aggressively lifted the dollar for much of the morning session.
The big question is whether the inflationary build-up now is temporary or permanent. Right now, the currency (market) seems to be leaning toward wanting to price in a more aggressive Fed. I think you would need more data to confirm that attitude, said Malpede. —Reuters
|
|
|
|