Dollar weakens in Asian trade
AFP
AFP, TOKYO: The dollar broadly weakened against its Asian peers yesterday as investors jostle their positions ahead of a crucial US interest rate decision later this week.
While the Federal Reserve is expected to lift borrowing costs before the end of the year, policymakers decisions have been complicated by ongoing concerns about Chinese growth and other weaknesses across the global economy. The greenback dipped to 120.23 yen from 120.57 yen Friday in New York, while the euro rose to $1.1367 from $1.1333 in US trade.
The euro was at 136.72 yen compared with 136.64 yen, ahead of a Bank of Japan policy decision, with talk swirling that it will soon unveil fresh stimulus measures to shore up the worlds number three economy.
Traders also edged out of the greenback and into high-yielding emerging market currencies, with the Indian rupee, Singapore dollar and Philippine peso edging up, while its Australian counterpart also edged away from six-year lows.
The possibility of a US rate hike has kept global markets on edge, with economists debating over whether the Federal Reserve should take that step on September 17 or not.
The Australian dollar, yen, euro, among a raft of others, are likely to see a short-term strengthening rally against the US dollar, said Angus Nicholson, a market analyst at IG Markets in Melbourne. But this is likely to dissipate as their longer-term trend in the second half of the year is further weakness against the dollar, he added. If the US central bank moves this week it would be the first hike in the benchmark federal funds rate since 2006.
Data released over the weekend showed growth in Chinas industrial production and retail sales accelerated in August, but the figures missed analyst expectations and did little to ease international concern about the worlds second-largest economy.
Industrial production, which measures output at factories, workshops and mines, rose 6.1 per cent year-on-year in August, while retail sales rose 10.8 per cent.
The Australian dollar, which is seen as a benchmark indicator for sentiment towards China because of the countrys close trade ties, was up 0.24 per cent at 71.16 US cents.
However, the Aussies earlier gains were clipped back as popular communications minister Malcolm Turnbull said he had requested a leadership vote, the second challenge to Prime Minister Tony Abbott this year.
In other Asia-Pacific currency trading, the dollar retreated to Sg$1.4074 from Sg$1.4133 Friday in Tokyo, and to 46.77 Philippine pesos from 46.81 pesos. It was also at 66.3525 Indian rupees compared with 66.5412 rupees.
The greenback slightly rose to Tw$32.53 from Tw$32.52, and to 14,329 Indonesian rupiah from 14,324 rupiah. The Chinese yuan fetched 18.88 yen against 18.90 yen.
