Tokyo, Feb 10: The dollar hit an 11-year low against the pound and fell within sight of a two-week low versus the euro on Tuesday as the market acted on what it saw as a lack of agreement by the G7 on coordinated action to stem its decline.
The pound spiked to a new 11-year high of USD 1.8635 while the euro edged up about 0.4 percent to around USD 1.2735 It hit a two-week high of USD 1.2765 on Monday on a perception that the Group of Seven nations are unlikely to make any joint efforts to curb the dollar's fall against the euro. Against the yen, however, the dollar drew support from wariness about Japan's yen-selling intervention as Japanese officials expressed satisfaction with a statement issued after the weekend meeting of G7 finance ministers and central bankers warning against excessive volatility in forex markets. "The Japanese government appears to think it won G7 endorsement for its intervention," said Kota Kimura, assistant manager at Shinkin Central Bank. "So I'm sure the authorities are full of confidence right now. And few players are willing to take (yen-long) positions." Japan sold a record 20 trillion yen (USD 189.2 billion) in intervention last year to curb the yen's rise, and a further seven trillion yen last month. Japanese Finance Minister Sadakazu Tanigaki said on Tuesday that G7 countries had made great efforts to make sure their final statement on currencies would not cause misunderstandings in financial markets. "We would like the communique to be read without misunderstandings," Tanigaki told reporters. "We paid great attention to making sure the communique accurately reflected our views, but of course we can't be sure how the market will take it." As of 10 p.m. EST Monday, the dollar held steady from late New York levels around 105.70 yen. Bureau Report