MW: Dollar edges down against rivals, as gold soars
By Lisa Twaronite, MarketWatch
TOKYO (MarketWatch) -- The dollar moved lower against major counterparts in Asian trading, pressured by rising gold futures on expectations that U.S. interest rates will remain low.
Gold prices continued to climb Thursday in electronic trading on Globex, with December gold reaching a contract high of more than $1,122 an ounce on bets that demand for the precious metal will remain strong against an extended backdrop of low interest rates. See Metals Stocks for more on gold.
By the Asian afternoon, the U.S. dollar was buying 89.79 yen, down from 89.83 yen in late North American trading Wednesday.
The euro traded at $1.4994, up from $1.4979 late Wednesday, and the British pound changed hands at $1.6559, a few ticks up from $1.6557.
Many currency investors were on the sidelines ahead of President Barack Obama's first state visit to Asia, for which he departs Thursday.
Obama's eight-day trip will take him to Tokyo, Beijing, Shanghai and Seoul as well as to the Asia-Pacific Economic Cooperation (APEC) summit in Singapore, where he is slated to meet with 18 fellow world leaders. Read more on Obama's Asian trip.
"Market participants will wait for policymakers' statements ahead of this weekend's APEC Summit and next week's U.S.-China Summit. We think chances of a U.S. dollar crisis should be limited, but the USD probably has not bottomed yet," Tomoko Fujii, a rates and currency strategist at Bank of America Securities-Merrill Lynch Japan, said in emailed comments Thursday.
The dollar slipped against South Korea's currency, falling 0.3% to 1,155.90 won, after the central Bank of Korea held its benchmark interest rate unchanged Thursday for the ninth straight month at 2.00% as widely expected. Read more on Bank of Korea rate decision.
The Australian dollar was up 0.5% against its U.S. counterpart at 93.36 U.S. cents, after earlier hitting a 15-month high of 93.69 cents after upbeat employment data.
Australia's jobless rate rose to a seasonally adjusted 5.8% in October from 5.7% the previous month, data showed Thursday, matching economists' consensus expectation, while the number of employed people rose by more than forecast. See full story on Australian jobs data.
On Wednesday, the greenback rebounded against the euro, as U.S. equity markets pared some of their strong gains earlier in the session and led traders to reconsider bets on riskier assets. See Wednesday's Currencies report.
