Dollar Range Bound Ahead of G20 Meeting
Friday, February 18, 2011
The dollar was rangebound against major currencies in Asia trade Friday following a negative market response to US data overnight and ahead of the G20 finance ministers' Paris meeting this weekend. The dollar traded at 83.36 yen in Tokyo compared to 83.30 in New York late Thursday. The euro rose to $1.3614 in Tokyo from $1.3605. The common currency firmed to 113.54 yen from 113.33.
US jobless claims and January inflation rose above expectations, and the dollar eased slightly on the mixed data as markets took an overall negative view, noted National Australia Bank's Spiros Papadopoulos.
"Investors appear to be focused on whether an improving business outlook will actually feed through to improvements in the labour market," he said. Dollar investors shunned the news of a strong rise in the regional industrial activity index of the Philadelphia branch of the Federal Reserve. Dealers cited increasing tensions in the Middle East and rising global inflation as the two key themes in the markets.
Oil prices were expected to rally higher in the event of escalating unrest, they said.
Brent oil briefly hit $104 per barrel on Thursday on such concerns after it rose to $104.52 on Wednesday the highest level since late September 2008 after Israel said Iran was sending two warships into the eastern Mediterranean.
Motonari Ogawa, senior dealer at Barclays Bank, expected investors to unwind long positions in the greenback ahead of a three-day weekend in the United States, while also saying that a large sell-off is unlikely. "It's better to assume the pair will briefly fall below 83.00," Citibank Japan's chief foreign exchange strategist Osamu Takashima also told Dow Jones Newswires. Group of 20 finance ministers and central bank governors are to meet for the first time under the bloc's French presidency Friday and Saturday in Paris, aiming to hammer out common criteria for measuring global economic imbalances.
posted @ 11:54 AM,
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