Wednesday, 25 March 2015 17:56
TOKYO: The dollar pulled back on Wednesday after rallying in US trade, where upbeat data boosted the case for an early Fed interest rate hike.
In Tokyo, the greenback weakened to 119.62 yen, against 119.77 yen in New York.
The euro inched up to $ 1.0926 from $ 1.0919 in US trade while edging down to 130.71 yen from 130.78 yen.
“Traders love a good pullback and as soon as the dollar looks like it’s setting up to resume its bullish trend currency traders will flood the market with trades,” Scott Schuberg, chief executive officer of Rivkin Securities in Sydney, told Bloomberg News.
“We could see continued volatility in foreign exchange markets.”
US data Tuesday showed sales of new single-family homes surged in February to a seven-year high, while consumer prices rose for the first time in four months.
The upbeat figures strengthened the case for the US central bank to raise rates in the coming months, which would be a plus for the dollar.
Demand for the greenback had stalled in Asia on Tuesday after the Fed’s vice chairman suggested interest rates would rise more slowly than expected.
Investors are tracking a series of speeches by Fed officials this week for clues about the timing of the long-awaited rate rise, which some expect may happen as early as June.
The euro won support from a key survey Tuesday that showed eurozone business activity hit a near four-year high in March as the 19-member eurozone’s modest economic activity continued, despite concerns over the Greek debt crisis.
The closely watched Markit Economics report Composite Purchasing Managers Output Index rose to 54.1 points from 53.3 in February, putting it well above the 50-point mark that shows growth.
The dollar was mixed against other Asia-Pacific currencies.
It slipped to Sg$ 1.3671 from Sg$ 1.3684 on Tuesday, to Tw$ 31.25 from Tw$ 31.35, to 1,101.06 South Korean won from 1,106.18 won, to 12,944.30 Indonesian rupiah from 12,962.00 rupiah, and to 32.54 Thai baht from 32.56 baht.
The greenback inched up to 62.28 Indian rupees from 62.20, and to 44.78 Philippine pesos from 44.72 pesos.
The Australian dollar rose to 78.76 US cents from 78.62 cents, while the Chinese yuan was unchanged at 19.26 yen.
Copyright AFP (Agence France-Presse), 2015
