News Column

Dollar slack in mid-102 yen in lull ahead of central bank meetings

August 4, 2014

The U.S. dollar traded narrowly in the mid-102 yen range Tuesday morning in Tokyo amid a lack of fresh incentives and a wait-and-see mood ahead of central bank meetings later in the week.

At noon, the dollar fetched 102.57-63 yen compared with 102.52-62 yen in New York and 102.58-59 in Tokyo at 5 p.m. Monday.

The euro was quoted at $1.3418-3420 and 137.63-66 yen against $1.3416-3426 and 137.64-74 yen in New York and $1.3429-3430 and 137.76-80 yen in Tokyo late Monday.

U.S. nonfarm payroll data for July released last Friday, which were below market expectation, provided traders an opportunity to adjust their positions, with the dollar slipping slightly against the yen, but this week major currency pairs are likely to stay tightly bound, said Yuji Kameoka, chief foreign exchange strategist at Daiwa Securities Co.

"In order for the dollar to break out of its current tight range, there needs to be a combination of more hawkish statements by (U.S. Federal Reserve) policymakers and signs of improving business sentiment," Kameoka said.

The week brings several central bank policy meetings, including that of the European Central Bank on Thursday and a two-day meeting of the Bank of Japan through Friday.

The euro moved little against the dollar and the yen in Tokyo.

"The ECB is unlikely to decide on any new policies at its meeting, but there is a possibility its policymakers will give out hints at further easing," Kameoka said.

The bailout by Portugal's government of a major domestic bank removed some downward pressure on the common currency, but broader concerns about financial institutions in the eurozone remain, Kameoka added.

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Source: Japan Economic Newswire

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