Dollar extends Fed rally in Asian trading
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Dollar extends Fed rally in Asian trading

Last Updated: Monday, June 24, 2013, 11:49
 
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Dollar extends Fed rally in Asian trading
Tokyo: The dollar on Monday extended a rally stoked by signs the US Federal Reserve would start winding up its massive stimulus drive later this year as investors flocked back to the greenback.

In Tokyo trade, the US unit fetched 98.41 yen from 97.87 yen in New York on Friday, continuing its march back toward the psychologically key 100-yen mark.

"Behind this US dollar lift are repatriation inflows from emerging markets as investors move to protect profits after a stellar period of performance fuelled by Fed policy," Credit Agricole said.

"Such dollar-repatriation inflows appear likely to remain the dominant influence this week with (the greenback) continuing to outperform other traditional safe-haven currencies including the Japanese yen and Swiss franc."

The euro meanwhile weakened on the dollar at $1.3105 from $1.3122 while it bounced back against the Japanese unit at 129.01 yen from 128.45 yen.

On Sunday, Japanese Prime Minister Shinzo Abe`s ruling Liberal Democratic Party (LDP) and its junior partner party New Komeito secured solid victories in the Tokyo metropolitan assembly election, seen as a litmus test for national upper house polls next month.

The win marked a vote of confidence in the premier`s economy-boosting plan, known as "Abenomics", which has sharply weakened the yen since late last year through a mix of big government spending and aggressive monetary easing.

Last week, the dollar soared as global markets reeled from the Federal Reserve`s signal it may start to taper its massive stimulus this year, with concerns heightened by a cash crunch in China.

On Wednesday Fed chief Ben Bernanke said the Federal Open Market Committee (FOMC) expected US growth to be strong enough to end its quantitative-easing program in mid-2014.

Easing measures tend to weigh on a currency as they flood markets with cash, making it less in demand.

Markets will also be looking to a string of US and Japanese economic data later this week, dealers said.

The dollar was mixed against other Asia-Pacific currencies.

It weakened to 31.11 Thai baht from 31.23 baht on Friday, to 59.66 Indian rupees from 59.68 rupees, to 43.71 Philippine pesos from 43.97 pesos and to 9,934 Indonesian rupiah from 10,038 rupiah.

The greenback strengthened to Sg$1.2764 from Sg$1.2754, to 1,157.45 South Korean won from 1,155.89 won, and to Tw$30.11 from Tw$30.09.

The Australian dollar slipped to 92.06 US cents from 92.23 cents while the Chinese yuan fetched 16.04 yen from 15.91 yen.

AFP



First Published: Monday, June 24, 2013, 11:49


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