By Myra P. Saefong, MarketWatch
TOKYO (MarketWatch) — The U.S. dollar lost ground against its currency rivals in Asia’s afternoon trading Tuesday with the greenback pressured by uncertainty over the direction of the Federal Reserve’s monetary policy.
The dollar index (DXY 79.52, -0.05, -0.06%) , which measures the performance of the U.S. unit against a basket of six other major currencies, fell to 79.470 compared with 79.602 on Monday in late North American trading.
At the moment, euro/U.S. dollar is “stuck” between negative and positive factors, according to David Forrester, a forex strategist at Barclays Capital.
Federal Reserve Chairman Ben Bernanke’s comments Monday on CBS’s “60 Minutes,” saying that the Fed could extend its Treasury purchases program beyond $600 billion, is a dollar-negative factor, he said in a note to clients. Read more about Bernanke’s comments.
Reports in the media that a deal has been reached between Congress and the Obama administration to extend the Bush tax cuts and a payroll tax holiday for two years is a dollar positive, while the public disagreement among European Union policymakers, which includes whether the EU should issue a Europe-wide bond, is a euro negative, he said.
The euro (EURUSD 1.3326, +0.0019, +0.1428%) traded at $1.3341, up from $1.3318 late Monday. See real-time currencies trading tools and quotes.
The euro rallied “on Irish press reports the Irish Budget will likely pass after two key independents indicated they will vote for the measure,” said Sue Trinh, senior currency strategist at the Royal Bank of Canada, in a note to clients. “The budget must pass for Ireland to secure the 85-billion-euro ($113 billion) aid package it sought from the EU and [International Monetary Fund,” she said.
Against the yen, the dollar (USDYEN 82.5600, -0.1100, -0.1331%) bought ¥82.43 compared with ¥82.64 late Monday.
