Tuesday, 24 March 2015 17:19
TOKYO: Dollar demand stalled on Tuesday after the vice chairman of the Federal Reserve suggested interest rates would rise more slowly than expected, while the euro won support from hopes for a Greek debt deal.
The greenback changed hands at 119.66 yen in afternoon trading, down from 119.71 yen in New York and 119.91 yen in Tokyo earlier Monday.
The euro bought $ 1.0919 and 130.69 yen against $ 1.0945 and 131.02 yen in US trade. However, it was stronger than the $ 1.0770 and 129.41 yen earlier Monday in Asia.
The dollar took a hit after the Fed’s Stanley Fischer said there would not be a “smooth upward path” for interest rates, which analysts took as further indication that the central bank will take its time before announcing a hike.
Investors are tracking a slate of speeches by Fed officials this week for clues about the timing of a long-awaited rate rise, which many had expected as early as June.
“Fischer’s comments dashed market speculation for a June rate hike and with the Fed stance, expectations are now pushed back to September,” Kengo Suzuki, chief currency strategist at Mizuho Securities, told Bloomberg News.
“It squashed greenback-buying momentum and led to a correction of one-sided dollar purchases and euro sales. The euro could reclaim $ 1.10.”
In New York, the European common currency won support as talks in Berlin between the leaders of debt-mired Greece and Europe’s biggest economy Germany ended with no open confrontation on Monday.
Greek Prime Minister Alexis Tsipras and German Chancellor Angela Merkel urged an end to the vicious “stereotypes” and name-calling that have threatened to destroy a bailout deal for Greece and lead it out of the eurozone.
On Monday, European Central Bank chief Mario Draghi said that the bank was “on track” to reach its declared goal for a programme of bond purchases launched this month in a bid to turn around the faltering eurozone economy.
The dollar was mostly weaker against other Asia-Pacific currencies, falling to Sg$ 1.3684 from Sg$ 1.3764 on Monday, to Tw$ 31.35 from Tw$ 31.39, to 1,106.18 South Korean won from 1,115.11 won, and to 12,962 Indonesian rupiah from 12,998 rupiah.
The greenback also fell to 62.20 Indian rupees from 62.29 rupees, and to 44.72 Philippine pesos from 44.84 pesos, but it inched up to 32.56 Thai baht from 32.54 baht.
The Australian dollar rose to 78.62 US cents from 78.22 cents, while the Chinese yuan weakened to 19.26 yen from 19.32 yen.
Copyright Reuters, 2015
