Q3 Earnings Alert! Plan early for this week’s stock reports with all key data in 1 placeSee list

Dollar rebounds vs. yen, slips against other major currencies

Published 05/02/2016, 11:30 AM
© Reuters. Businessmen walk past a display showing the dollar to yen exchange rate in Tokyo, Japan
AUD/USD
-
CBKG
-
WFC
-
DX
-
DXY
-

By Richard Leong

NEW YORK (Reuters) - The dollar rose on Monday from its biggest weekly fall in more than seven years against the yen but softened against other major currencies, in particular the euro, which was helped by stronger German manufacturing data.

Worries over Japanese policymakers' inability to stem the yen's rise pushed the dollar to an 18-month low of 106.14 yen in the first hours of Asian trade. It later bounced to 106.78 yen, up 0.4 percent on the day.

Finance Minister Taro Aso was quoted in Japanese media over the weekend as saying he viewed the yen's strength as "extremely concerning," stoking speculation the Bank of Japan might intervene to stem the currency's rise.

"It contributed to the performance of the yen, while we are seeing the dollar softer against other currencies," said Eric Viloria, currency strategist at Wells Fargo (NYSE:WFC) Securities in New York.

The dollar index dipped 0.35 percent to 92.747 (DXY) after hitting its lowest since January 2015 at 92.568.

The greenback has fallen since mid-March after Federal Reserve Chair Janet Yellen signaled the Fed would proceed with further rate increases with "caution."

The dollar's weakness intensified following the BOJ's surprise inaction on further stimulus at its policy meeting last week.

"One can only imagine that they did not want a stronger yen, but the authorities there caused it by taking no action last week," Thu Lan Nguyen, a strategist with Commerzbank (DE:CBKG) in Frankfurt, said of Aso's comments.

Last week's nearly 5 percent gain for the yen was its biggest since the 2008 crisis and pushed "long" bets on more gains to the highest on record. This raised the risk the dollar could weaken to 100 yen, some analysts said. [IMM/FX]

With British markets closed for a holiday on Monday, sterling reached a five-month peak versus the dollar on receding worries about the "Brexit" referendum on June 23. The pound was last up 0.3 percent at $1.4653 .

Monday's data on global manufacturing supported the notion of sluggish global growth. U.S. factory growth slowed more than expected in April, while Chinese manufacturing activity expanded only marginally.

German factory data, while marginally below forecast, showed the sector grew solidly. That lifted the euro to $1.1532 , the highest since late August, according to Reuters data.

© Reuters. Businessmen walk past a display showing the dollar to yen exchange rate in Tokyo, Japan

An Australian central bank meeting will be a focus on Tuesday. The Aussie dollar was up 0.1 percent at $0.7615 on Monday, adding to an 11 percent surge since hitting multi-year lows in January.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.