News Column

Dollar slips to mid-101 yen as low U.S. yields weigh on rate view

July 16, 2014

The U.S. dollar slipped to the mid-101 yen range Thursday morning in Tokyo, its recent rally triggered by hawkish hopes for a Federal Reserve interest rate hike losing steam without support from U.S. Treasury yields.

At noon, the dollar changed hands at 101.54-55 yen compared with 101.62-72 yen in New York and 101.69-70 yen in Tokyo at 5 p.m. Wednesday.

The euro was quoted at $1.3528-3529 and 137.38-39 yen against $1.3521-3531 and 137.50-60 yen in New York and $1.3553-3554 and 137.82-86 yen in Tokyo late Wednesday afternoon.

The dollar fell slightly against the yen even as U.S. economic data released overnight on industrial production and producer prices in June showed improvement.

"U.S. interest rates rose and then fell again yesterday and fell even further this morning, and that's weighing (on dollar-yen)," said Shinichiro Kadota, foreign exchange strategist at Barclays Bank.

The U.S. currency had earlier risen on comments in Fed chief Janet Yellen'sSenate committee testimony on Tuesday saying continued strength in the U.S. labor market could lead the central bank to speed up the timing of a hike in its benchmark rate hike currently near zero.

She also delivered testimony in a House committee on Wednesday, though it had little effect on currency rates.

The euro Thursday morning was flat against the dollar near a one-month low hit overnight in New York and dropped to a five-month low against the yen.

The European Central Bank's large-scale monetary easing measures unveiled at its June policy meeting are slowly pushing the shared currency down, Kadota said.

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Source: Japan Economic Newswire

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