News Column

Dollar rises to upper 101 yen in morning on upbeat U.S. data

July 1, 2014



The U.S. dollar drifted up to the upper 101 yen zone Wednesday morning in Tokyo after data showed an upbeat U.S. economy and sapped the yen of its appeal as a safe haven.

At noon, the dollar fetched 101.60-61 yen compared with 101.49-59 yen in New York and 101.51-52 yen in Tokyo at 5 p.m. Tuesday.

The euro was quoted at $1.3678 and 138.98-139.02 yen against $1.3674-3684 and 138.84-94 yen in New York and $1.3692-3693 and 138.99-139.03 yen in Tokyo late Tuesday afternoon.

The U.S. manufacturing sector expanded for the 13th straight month in June, though at a slower pace than the previous month, according to a report released overnight by the Institute for Supply Management.

New car sales in the United States increased 1.2 percent in June from a year earlier, according to market research firm Autodata Corp.

U.S. Treasury yields rose following the reports, drawing traders to the dollar from the yen on widening interest rate gaps.

The U.S. currency is likely to remain confined in a narrow range between 101.50 yen and 101.70 yen on Wednesday, however, as market participants await trading cues later in the week, said Yuzo Sakai, manager of foreign exchange business promotion at Tokyo Forex & Ueda Harlow.

U.S. Federal Reserve chief Janet Yellen is set to speak at the International Monetary Fund later Wednesday, a day before the U.S. government releases June jobs data.

"She's unlikely to shift to a hawkish stance on raising interest rates in view of the recent (mixed) economic data, so I don't expect the dollar to gain much against the yen even after she speaks," Sakai said.

The euro traded in a tight range against the dollar and the yen Wednesday morning, a day before the European Central Bank meets to deliberate monetary policy.

The ECB is expected to stand pat on policy after unveiling unprecedented easing measures including a negative deposit rate at its June meeting.



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Source: Japan Economic Newswire


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