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Dollar eases in Asian trade, pressured by concern over U.S. economy

Dollar eases in Asian trade, pressured by concern over U.S. economy

The U.S. dollar lost ground in Asian trade yesterday, pressured by continued worries about the health of the U.S. economy and financial markets, dealers said.
The dollar fell to 109.67 yen in Tokyo morning trade from 109.88 in New York late Wednesday. The euro rose to US$1.4770 from 1.4745 but slipped to 161.93 yen from 162.07.
"Fears about the U.S. economy are growing again," said Sumitomo Trust Bank chief strategist Saburo Matsumoto, adding that the fallout from the financial crisis on Wall Street has not yet run its course.
The single currency has rebounded from a six-month low of US$1.4631 struck on Tuesday as renewed worries about the health of U.S. mortgage finance giants Fannie Mae and Freddie Mac weigh on the greenback.
Dealers said the dollar might come under selling pressure if upcoming U.S. economic indicators - including weekly jobless claims due yesterday and next week's monthly employment report - disappoint markets, dealers said.
"We might see some further scaling back of already diminished expectations for the Federal Reserve to raise interest rates over the next six months," wrote NAB Capital strategist John Kyriakopoulos in a note.
Reports quoting Gary Stern, president of the Federal Reserve Bank of Minneapolis, as saying that now is "a good time to be patient" added to speculation that the U.S. central bank is in no hurry to raise interest rates.
The Fed has now kept its key lending rate on hold for two straight policy meetings after slashing rates by 3.25 percentage points between September and late April in an attempt to kick-start flagging U.S. growth.
The European Central Bank's benchmark rate stands at 4.25 percent but there is speculation that it may be lowered next year due to growing concerns about the health of the eurozone economies.
The yen shrugged off news that Japan's trade surplus shrank 86.6 percent in July amid weak demand in the United States, with investors taking some comfort from a rebound in overall exports.


Updated : 2021-04-18 16:10 GMT+08:00