News Column

Dollar holds in upper 101 yen in morning, boosted by U.S. jobs data

July 24, 2014

The U.S. dollar held firm in the upper 101 yen zone Friday morning in Tokyo on renewed optimism about the U.S. economy, maintaining its overnight gains from upbeat jobless claims data out of the world's largest economy.

At noon, the dollar fetched 101.78-79 yen compared with 101.76-86 yen in New York and 101.45-46 yen in Tokyo at 5 p.m. Thursday.

The euro was quoted at $1.3466-3468 and 137.06-07 yen against $1.3460-3470 and 137.03-13 yen in New York and $1.3473-3474 and 136.69-73 yen in Tokyo late Thursday afternoon.

The dollar continued to be buoyed in Tokyo by expectations of the Federal Reserve bringing forward interest rate hikes, after climbing out of the mid-101 yen zone overnight as positive U.S. jobs data triggered a rise in U.S. Treasury bond yields, said Yuji Saito, executive director of foreign exchange at Credit Agricole Corporate & Investment Bank in Tokyo.

Seasonally adjusted U.S. claims for unemployment insurance in the week ended July 19 came in at 284,000, the lowest level since February 2006.

"This raises expectations Fed members will take a more hawkish stance at the (Federal Open Market Committee) meeting next week, which is positive for the dollar," Saito said.

But the dollar's momentum was stalled in Tokyo by traders' reluctance to boldly shift their positions as ongoing geopolitical tensions left the door open to shocks over the weekend, he added.

Japan's June consumer prices released in the morning were largely as forecasted, and unlikely to alter the Bank of Japan's monetary policy tack, thus making little impact on currency trading.

The euro held steady after picking up against the dollar and yen overnight on sunny German and French July manufacturing activity reports, but "In the longer term it's still trending lower on fundamentals, including expectations the European Central Bank will introduce quantitative easing at some point," Saito said.

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Source: Japan Economic Newswire

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