FXS: Dollar Gains On Yen After Officials Hint At Action
CURRENCIES: Dollar Gains On Yen After Officials Hint At Action
By Deborah Levine
The U.S. dollar posted tiny gains versus major currencies on Wednesday, making one of its strongest moves against the yen after comments from Japanese officials suggested policy makers could move to limit the yen's gains.
The dollar was steady versus the euro as investors look to stock markets for hints of whether investors may be willing to keep buying higher-yielding, and often more volatile, currencies than the greenback amid fading worries over last week's debt debacle in Dubai. U.S. benchmark indexes opened mixed.
The dollar traded at 87.22 yen, up from 86.64 yen in North American trade late Tuesday afternoon.
The dollar index, (DXY) which measures the U.S. currency against a trade-weighted basket of six major rival currencies, traded at 74.464, compared to 74.481 late Tuesday, when it fell to its lowest level since August 2008 during the session.
The euro traded at $1.5075 in recent action, down slightly from $1.5107 late Tuesday, also the highest closing level in 15 months. Trading in the currency may be limited before the European Central Bank meets on Thursday.
The greenback took little direction from data that showed U.S. private-sector firms shed another 169,000 jobs in November.
The data from ADP, which excludes government workers, comes two days before the Labor Department's more closely-followed payrolls report, which is forecast to show the economy lost 100,000 jobs, according to the median estimate of economists surveyed by MarketWatch.
"It is important to recognize that the sell-off in the U.S. dollar is beginning to find some near-term support," said Kathy Lien, director of currency research at Global Forex Trading.
For currency pairs to push higher will require some catalyst, she said, which could come from the Federal Reserve's collection of anecdotes about the economy coming later in the session. The so-called Beige Book is due for release at 2 p.m. Eastern time.
Yen strength
Japanese Prime Minister Yukio Hatoyama said the yen's rise can't be left "as is," according to comments published in the Nikkei newspaper.
Later, a Cabinet spokesman said Hatoyama wasn't signaling that the government was set to intervene, news reports said.
The dollar notched a 14-year low last week versus the Japanese yen below 85.00 yen. A strong yen is seen adding to deflationary pressures in Japan by making imports cheaper. It also makes Japanese exports more expensive to foreign buyers, undercutting the nation's competitiveness in the world market.
Still, data on speculative positions in currencies indicate the market is biased in favor of the yen, analysts said. The dollar has lost 4.4% versus the Japanese currency this year.
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