Dollar weakens in Asian trade today
Dollar weakened in Asian trade with few trading cues as firms adjust their month-end forex position.
TOKYO (AFP) - The dollar weakened in Asian trade Thursday with few trading cues as firms adjust their month-end forex positions, dealers said, while concerns about global growth hung over markets.
TOKYO, May 30, 2013 (AFP) - The dollar weakened in Asian trade Thursday with few trading cues as firms adjust their month-end forex positions, dealers said, while concerns about global growth hung over markets.
The greenback had dropped below the 101-yen level in early Tokyo trade as the Nikkei 225 plunged more than three percent -- yen trade and the benchmark stock index are closely interlinked as the value of the Japanese currency directly affects the competitiveness of the country s exporters.
But by midday, the dollar crept back to 101.07 yen against 101.13 yen in New York late Wednesday.
"No news are behind the move, just flows," a senior dealer at a major Japanese bank told Dow Jones Newswires.
"The correlation between movements in the Nikkei and the dollar/yen appear to be gradually weakening. I think support at the 100-yen level remains strong."
Japanese firms are major currency sellers and buyers as part of running their overseas operations with euro trade also affected by such deals on Thursday, dealers said.
The European single currency gained to $1.2960 from $1.2942 in US trade, while it strengthened against the Japanese unit to 131.01 yen from 130.87 yen.
"It is difficult to envisage EUR/USD strengthening much from current levels, with 1.3030 seen as a strong resistance level," Credit Agricole said.
Dealers said the outlook on the euro was largely driven by weak economic conditions in the 17-nation bloc that might spark more central bank policy moves, which tend to weaken currencies.
Markets are also looking to the US Federal Reserve for more clues as to whether the central bank will roll back its monthly bond-buying programme, known as quantitative easing, as upbeat US economic data boosts the outlook for the world s biggest economy.
However, the Organisation for Economic Cooperation and Development (OECD) on Wednesday trimmed its world economic growth forecast for 2013 to 3.1 percent from 3.4 percent.
The OECD also slashed its growth forecast for the world s most advanced economies, except Japan, but said growth should pick up later this year.
