MW: Dollar trades steady vs. rivals; yen boosted by trade data
Year-end positioning is key driver of dollar trading, analysts say
By Lisa Twaronite & Polya Lesova, MarketWatch
FRANKFURT (MarketWatch) -- The U.S. dollar was little changed against its major rivals in thin trading on Monday, as ongoing worries over Greece's debt problems and positive recent U.S. economic data continued to underpin the greenback.
The dollar index (DXY 77.74, -0.03, -0.04%) , which tracks the greenback against a trade-weighted basket of six major counterparts, recently traded at 77.758 compared with 77.821 in late North American trading Friday.
The index rose as high as 78.096 on Friday, marking its highest level since Sept. 4, as traders reversed so-called short trades, which bet the greenback would fall further
Year-end factors are currently the main drivers behind dollar trading, said currency strategists at Brown Brothers Harriman & Co.
"We continue to caution that while we do expect the dollar to weaken again as the new year begins, picking a top in the dollar in the midst of year-end position unwinding is risky," they wrote in a note to clients.
The greenback has rallied in recent sessions, as concerns over Greece's government deficit have weighed on the euro and as traders have started to reassess when the Federal Reserve could begin to tighten U.S. monetary policy.
The euro (CUR_EURUSD 1.43, +0.00, +0.18%) traded at $1.4339, little changed from $1.4323 on Friday. The British pound (CUR_GBPUSD 1.61, -.00, -0.04%) edged down 0.2% to $1.6131.
The dollar (CUR_USDYEN 90.44, -0.08, -0.09%) eased slightly to 90.40 Japanese yen, compared with 90.43 yen late Friday.
The Japanese currency got support from a report Monday that showed Japan posted a wider-than-expected trade surplus in November. Read more on Japan trade data.
The surplus came to 373.9 billion yen ($4.14 billion), Ministry of Finance data showed Monday, greater than the 319.2 billion yen consensus forecast of economists polled by Nikkei and Dow Jones Newswires.
"Japan's latest merchandise trade data confirmed the moderate upward trend, and the current-account surplus is also likely to maintain the upward trend, placing upward pressure on the [yen]," said Tomoko Fujii, a rates and currency strategist at Bank of America Securities-Merrill Lynch Japan.
