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Thứ Tư, 26 tháng 6, 2013

Dollar a Tad Higher But China Concerns Sap Momentum - Wall Street Journal- India

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The dollar was a tad higher against the yen in Asia Thursday as risk sentiment improved somewhat on a gain in Asian stock markets. But the greenback lacked steam for further gains as concerns lingered over China's cash crunch and broader economy.

Wednesday's rally in the U.S. stock market gave Asian stocks a lift across the board, including the closely watched Shanghai Stock index. At 0450 GMT, the index was up 0.39% from the previous day. The dollar was at ¥97.77 against ¥97.57 late in New York. The euro was at $1.3032 against $1.3087.

"It was not surprising that the dollar went up to ¥98 or ¥99 overnight amid the U.S. stock market rally due to the renewed view that the timing of Fed's tapering of its massive bond purchase might be pushed back," said Minori Uchida, chief currency analyst at the Bank of Tokyo-Mitsubishi UFJ.

"But the tepid dollar advance indicates that the market remains alert to downside risks," Mr. Uchida said, adding, "the biggest risk factor for now is China."

The announcement by the People's Bank of China earlier this week that it would inject liquidity into the financial system alleviated jitters in financial markets.

But Mr. Uchida said it is too soon to conclude the Chinese market has regained full stability. He said it would be necessary to watch if unsettling conditions would persist into July, and if China can avoid "over-killing" the economy.

Despite such concerns, Mr. Uchida said the dollar could be supported at ¥96.00 in the near term.

Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo, said the dollar/yen "could find support" as profit-taking before a half-year book-closing was out of the way, as well as from talk of yen-selling related to the formation of trust funds that invest overseas.

Meanwhile, data released by the finance ministry Thursday showed investors based in Japan sold a net ¥1.19 trillion in foreign bonds and notes the week of June 16-22, marking the sixth consecutive week of selling.

Traders are focusing on U.S. economic indicators later in the global day, particularly unemployment claims and the PCE price index. The Fed has placed importance on employment in considering a possible reduction of its asset purchases later this year.

The British pound was at $1.5336 against $1.5381, while the Australian dollar was at US$0.9322 against US$0.9330.

Write to Tatsuo Ito at

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