SINGAPORE — The U.S. dollar continued to tumble Thursday, prompting a wave of foreign-exchange intervention by central banks in South Korea, Taiwan, the Philippines and Thailand seeking to limit damage to their export industries.
“A strong dollar is extremely important in the given circumstances,” European Central Bank President Jean-Claude Trichet told reporters. The comment ordinarily would be expected to bolster the greenback, but the dollar initially fell further in response.
“I think he really didn’t give the market enough,” said Steve Butler, director of foreign exchange at Scotia Capital in Toronto. “Normally, that would give the U.S. dollar at bit of a lift, but I think the market’s already focusing on the topside in euro, and that remains the vulnerable side.”
Traders said the dollar selloff is unlikely to fade soon, given the prospect of a long period of low U.S. interest rates to support a sluggish U.S. economy and increasing signs central banks in Asia will begin tightening monetary policies.
Early Thursday afternoon in New York, the euro was bid at $1.4805, compared with $1.468 late Wednesday. The U.S. currency was at 88.32 yen, down from 88.64 yen late Wednesday in New York. The British pound was at $1.6103, compared with $1.5948.
Surprisingly strong employment data in Australia bolstered speculation the Reserve Bank of Australia,which Tuesday became the first central bank for a Group of 20 country to raise rates, will deliver another increase before the end of the year. The news pushed the Australian dollar up sharply, and intensified buying of Asian currencies.
Go to Article
No comments:
Post a Comment