Tuesday, 18 August 2015 10:25
TOKYO: The dollar rose against the yen Tuesday as strong housing data bolstered hopes for a US interest rate hike, while the Thai baht slumped to a fresh six-year low after a deadly Bangkok bombing.
In Tokyo, the greenback edged up to 124.44 yen, against 124.41 yen in New York, after the National Association of Home Builders said homebuilder sentiment hit its highest level since the recession ended in 2009.
The positive news come ahead of the release of minutes from the US Federal Reserve’s last meeting, due Wednesday, which markets will analyse for clues about the central bank’s timeline for lifting interest rates.
Some expect a rate hike — which is a plus for the dollar — as early as next month.
In other trading, the euro ticked up to $ 1.1080 and 137.89 yen against $ 1.1078 and 137.81 yen in New York.
The baht slumped to a fresh six-year low in the wake of the deadly blast that killed 21 people and wounded scores more in an unprecedented attack on the country’s capital.
The unit slipped to 35.64 against the dollar on Tuesday, its lowest level since 2009, as the bombing at a shrine popular with foreign visitors threatened to damage Thailand’s crucial tourism industry.
“This tragic news just adds to the poor fundamentals of Thailand,” Sue Trinh, senior currency strategist at Royal Bank of Canada in Hong Kong, told Bloomberg News.
The bombing came hours after official data on Monday showed Thailand’s economy slowed in the second quarter, hit by weak domestic demand and exports, with growth expected to be hampered this year by China’s devaluation of the yuan.
Officials warned growth faces “major constraints” after China cut the yuan last week, sparking fears of a currency war in Asia in which countries vie to keep their exports competitive by depreciating their units.
“There were many issues tied to the Thai baht” even before this bombing happened, Trinh said.