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U.S. dollar strengthens to two-month high against yen

U.S. dollar strengthens to two-month high against yen

The U.S. dollar hit a two-month high against the yen in Asian trade yesterday, lifted by better-than-expected U.S. manufacturing data, dealers said.
They said the U.S. dollar also gained on the euro as the robust data raised doubts about the chances of an early interest rate cut by the U.S. Federal Reserve.
The U.S. dollar climbed above 120 yen briefly for the first time since late February before easing back to 119.96 yen in Tokyo afternoon trade.
The euro eased to US$1.3572 after US$1.3606 and to 162.81 yen from 162.99.
"Traders seem to be adjusting their positions after massive purchases of euros in the past few days, a move which is certainly prompted by the brisk U.S. manufacturing data," said Marito Ueda, a currency trader at FX Prime. "There's no reason to buy the yen for the moment," added Ueda.
The Institute of Supply Management's index of U.S. industrial activity rose to 54.7 from 50.9 in March, beating market expectations for a slight gain to 51.0.
Analysts said the data made it more likely that the U.S. Federal Reserve would maintain interest rates at current levels when it meets on May 9.
Business in Asia was relatively quiet as players took to the sidelines ahead of a four-day holiday weekend in Tokyo, dealers said.
NT dollar falls 0.03%
Meanwhile, the New Taiwan dollar slipped on speculation investors sold the currency to put money in higher-yielding securities overseas.
Taiwan's currency fell 0.03 percent to NT$33.286 against the U.S. dollar yesterday, according to Taipei Forex Inc.
"The New Taiwan dollar is very weak," said Craig Chan, Lehman Brothers Holdings Inc.'s Asian currency strategist in Hong Kong. "It's still being used as a funding currency."
Demand for the currency was limited on speculation an inflation report this week will back the case for the central bank to keep borrowing costs unchanged. The statistics bureau will probably say today that growth in consumer prices slowed in the year to April to 0.74 percent, according to the median estimate of 13 economists in a Bloomberg survey.


Updated : 2020-12-02 11:58 GMT+08:00