By Anjli Raval
Published: December 30 2009 11:54 | Last updated: December 30 2009 12:03
The US dollar hit a fresh two-month high against the yen on Wednesday as the improving outlook for US consumer confidence continued to provide support.
The dollar was up 0.1 per cent against the yen at Y92.11 after reaching a peak of Y92.27 in early trade. The US currency was steady against the euro, hovering either side of the flat line, at $1.4350. As the year-end fast approached, the dollar remained in demand on hopes that the economic recovery would allow the Federal Reserve to begin tighenting its ultra loose monetary policy.
The dollar index, a gauge of the greenback’s performance against six other major currencies, was stable at 77.919, recovering from the low of 77.332 on Tuesday.
The US currency has continued to benefit from the view that the country’s economy is on course to recover, allowing the Federal Reserve to begin exiting its ultra loose policies.
Sterling hit a two-and-a-half month low against the US dollar over gloom surrounding the British economy and rising public debt.
The pound struggled to find positive sentiment and lost 0.3 per cent to $1.5840, its lowest level since October 13. The euro gained 0.2 per cent against sterling to £0.9049 in holiday-thinned trade.
Overall market activity was very subdued ahead of the new year, with Japanese markets closed on Thursday and European and US markets closed on Friday.
The Swiss franc remained within striking distance of the nine-month high hit against the euro in the previous session. The Swiss currency slipped 0.1 per cent against the euro to SFr1.4883 from the nine-month peak of SFr1.4849.
Elsewhere, the Australian and New Zealand currencies broadly held on to the gains made in the previous session after a boost in risk appetitie and growing optimism over commodity prices. The Aussie dollar rose 0.1 per cent to $0.8932 and the Kiwi dollar also gained 0.1 per cent to $0.7179.
Meanwhile, the Canadian dollar rose 0.5 per cent against the US dollar to $1.0486. Neil Mellor, analyst at BNY Mellon, said the Canadian currency was worthy of attention going into the new year as investors continued a concerted move to secure viable alternative reserve currencies and assets and “a move to parity in US dollar/Canadian dollar could well prove to be one of the surprises of 2010”.
