المراقب العام
03-15-2010, 04:21 PM
TOKYO, March 15 (Reuters) - The dollar rose broadly on Monday as a drop in Asian stocks prompted some investors to shy away from riskier assets such as the euro and sterling which have been hit by sovereign debt concerns.
The yen was also on the defensive against the dollar, hovering within striking distance of a three-week low, on growing expectations that the Bank of Japan may consider loosening monetary policy further this week.
But sovereign debt worries also limited gains for the dollar, with traders citing a report by the Financial Times that Moody's was due to say there would be downward pressure on the U.S.'s top credit rating unless public finances get in better shape than the Obama administration predicts.
Moody's later said on Monday that the credit ratings of the world's four largest triple-A sovereign debt issuers -- the United States, UK, France and Germany -- as well as Spain are safe but risks to their blue-chip status have grown. [ID:nLDE62B1T5]
"Concerns about the possibility that the U.S. and UK may lose their top ratings are said to be behind today's weakness in regional stocks," said a manager of forex trading at a Japanese trust bank.
"Investor risk aversion usually supports both the dollar and the yen, but the yen could be the only one to benefit this time since the U.S. has also been included as a object of sovereign risk concern," the manager said.
The dollar index .DXY rose 0.1 percent from late New York trade on Friday to 79.961, hovering above its short-term support level at around 79.60.
The euro EUR= (http://www.reuters.com/finance/currencies/quote?srcCurr=EUR&destCurr=USD) fell 0.3 percent to $1.3733, retreating from Friday's peak of $1.3796 which was hit when euro zone January industrial output showed its biggest ever monthly increase, prompting speculators to pare back short euro positions. [ID:nLDE62B0SD] [IMM/FX]
On Friday, the euro also drew strength from reports that euro zone ministers have agreed to a rescue strategy for Greece, if one is needed. [ID:nLDE62C066]
Traders said there was also talk in the market of a large selling order around $1.3800 which could be options-related.
The euro fell 0.1 percent on the yen to 124.52 yen EURJPY=R, pulling back from a three-week high above 125 yen hit on Friday.
The pound GBP=D4 (http://www.reuters.com/finance/currencies/quote?srcCurr=GBP&destCurr=USD) slipped 0.3 percent to $1.5159, paring some of its robust gains on Friday.
BOJ AND FED EYED
The BOJ starts a two-day meeting on Tuesday and it is likely the bank will announce additional easing measures, like boosting the size or duration of its special fund-pumping operations. [ID:nTOE62B065]
The bank could also extend the maturity of this new operation from three months to six months, or increase its outright purchases of Japanese Government bonds.
All in all, analysts say, the policy moves may be guided by a desire to weaken the yen in a bid to support Japan's ailing export-reliant economy. For more click on [ID:nSGE629088].
In contrast, solid retail sales data offered the U.S. dollar support against the yen, heading into a week when the Federal Reserve's policy setting committee meets on Tuesday.
U.S. retail sales rose unexpectedly last month despite heavy snow storms, boosting hopes of a durable economic recovery. [ID:nN12202974]
Analysts say, since U.S. consumers are buying more and companies appear to be on the verge of hiring again, the Fed may ponder how long to keep its ultra-low rate pledge. [ID:nN12128629]
The Bank of Japan, on the other hand, is one of the few central banks that is likely to ease its ultra-loose policy even further.
The yen JPY= (http://www.reuters.com/finance/currencies/quote?srcCurr=JPY&destCurr=USD) slipped to 90.64 yen per dollar, from 90.42 late in New York on Friday when it fell to as low as 91.09 on trading platform EBS, its lowest level since Feb 23.
"While the dollar can move higher on a storm of BoJ easing and stronger U.S. data and therefore higher yields, momentum will be fleeting until the Fed tightening cycle is well underway," JP Morgan said in a note.
The yen was also on the defensive against the dollar, hovering within striking distance of a three-week low, on growing expectations that the Bank of Japan may consider loosening monetary policy further this week.
But sovereign debt worries also limited gains for the dollar, with traders citing a report by the Financial Times that Moody's was due to say there would be downward pressure on the U.S.'s top credit rating unless public finances get in better shape than the Obama administration predicts.
Moody's later said on Monday that the credit ratings of the world's four largest triple-A sovereign debt issuers -- the United States, UK, France and Germany -- as well as Spain are safe but risks to their blue-chip status have grown. [ID:nLDE62B1T5]
"Concerns about the possibility that the U.S. and UK may lose their top ratings are said to be behind today's weakness in regional stocks," said a manager of forex trading at a Japanese trust bank.
"Investor risk aversion usually supports both the dollar and the yen, but the yen could be the only one to benefit this time since the U.S. has also been included as a object of sovereign risk concern," the manager said.
The dollar index .DXY rose 0.1 percent from late New York trade on Friday to 79.961, hovering above its short-term support level at around 79.60.
The euro EUR= (http://www.reuters.com/finance/currencies/quote?srcCurr=EUR&destCurr=USD) fell 0.3 percent to $1.3733, retreating from Friday's peak of $1.3796 which was hit when euro zone January industrial output showed its biggest ever monthly increase, prompting speculators to pare back short euro positions. [ID:nLDE62B0SD] [IMM/FX]
On Friday, the euro also drew strength from reports that euro zone ministers have agreed to a rescue strategy for Greece, if one is needed. [ID:nLDE62C066]
Traders said there was also talk in the market of a large selling order around $1.3800 which could be options-related.
The euro fell 0.1 percent on the yen to 124.52 yen EURJPY=R, pulling back from a three-week high above 125 yen hit on Friday.
The pound GBP=D4 (http://www.reuters.com/finance/currencies/quote?srcCurr=GBP&destCurr=USD) slipped 0.3 percent to $1.5159, paring some of its robust gains on Friday.
BOJ AND FED EYED
The BOJ starts a two-day meeting on Tuesday and it is likely the bank will announce additional easing measures, like boosting the size or duration of its special fund-pumping operations. [ID:nTOE62B065]
The bank could also extend the maturity of this new operation from three months to six months, or increase its outright purchases of Japanese Government bonds.
All in all, analysts say, the policy moves may be guided by a desire to weaken the yen in a bid to support Japan's ailing export-reliant economy. For more click on [ID:nSGE629088].
In contrast, solid retail sales data offered the U.S. dollar support against the yen, heading into a week when the Federal Reserve's policy setting committee meets on Tuesday.
U.S. retail sales rose unexpectedly last month despite heavy snow storms, boosting hopes of a durable economic recovery. [ID:nN12202974]
Analysts say, since U.S. consumers are buying more and companies appear to be on the verge of hiring again, the Fed may ponder how long to keep its ultra-low rate pledge. [ID:nN12128629]
The Bank of Japan, on the other hand, is one of the few central banks that is likely to ease its ultra-loose policy even further.
The yen JPY= (http://www.reuters.com/finance/currencies/quote?srcCurr=JPY&destCurr=USD) slipped to 90.64 yen per dollar, from 90.42 late in New York on Friday when it fell to as low as 91.09 on trading platform EBS, its lowest level since Feb 23.
"While the dollar can move higher on a storm of BoJ easing and stronger U.S. data and therefore higher yields, momentum will be fleeting until the Fed tightening cycle is well underway," JP Morgan said in a note.