US Dollar Foreign Exchange


The US dollar holding narrow losses against the euro but steady versus the Japanese yen

Published on January 10, 2012 by   ·   No Comments

The US dollar ended in Asia holding narrow losses against the euro but steady versus the Japanese yen, after shuffling in tight trading ranges through a lackluster Tuesday session.

Risk appetite was generally stable, helped along in the late morning by a better-than-expected reading of China’s trade balance for December and further assisted by a positive close in Asia-Pacific stock markets.

The data showed exports for December beat consensus with a 13.4% y/y rise, and above Market News International’s median forecast of +12.9%. Trade surplus for December as per MNI calculation also came in at $16.5 bln versus consensus forecast of $10.2 bln.

Euro to US dollar opened with a brief rise to a morning high of $1.2781, driven by pre-fixing euro yen demand, which also lifted the cross to a Y98.27 high.

The move fizzled out after the Tokyo fix, and profit-taking then drove euro-dollar down to $1.2761 while euro-yen slipped back to a morning low of Y98.06.

In the late afternoon, euro-dollar staged another rally to a $1.2791 high as regional stock markets ended the session mostly higher, giving risk sentiment a further lift. Near the end of the Asian day, euro-dollar was at $1.2785, up from $1.2765 in late US trade overnight while euro-yen was at Y98.20 versus Y98.12 overnight.

In stock markets, Japan’s Nikkei 225 Index closed up 0.38% at 8,422.26 while the Shanghai Composite Index ended up 2.69% at 2,285.74.

“The euro rebounded against the US dollar as investors took profit from their short bets against the euro in the absence of any significant euro-zone developments,” noted United Overseas Bank analysts.

The US dollar to Japanese yen meanwhile was at Y76.82 in late Asian trade, not much changed from Y76.86 near the US close overnight. The pair spent the day trapped in a very narrow Y76.78 to Y76.90 range.

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