CURRENCIES: Dollar Gains On Euro In Asian Trading
By Lisa Twaronite
The dollar gained on the euro in Asian trading Thursday, benefiting from
risk aversion as Asian share markets slumped and investors sought the perceived
safety of the low-yielding currency.
The euro traded at $1.4893, down from $1.4956 in late North American trading
while the British pound rose to $1.6677, up from $1.6736.
The dollar bought 88.95 yen, up from 89.45 yen late Wednesday.
But despite the greenback's gains against the Japanese unit Thursday, analysts
say risk aversion gave some support to the also low-yielding yen. The Bank of
Japan will conclude its two-day policy meeting Friday, and is widely expected to
leave its overnight call rate target at 0.1%.
Some analysts also say the yen is poised to benefit from China's eventual
revaluation of the yuan, which is now kept artificially low against the dollar.
"We continue to believe that yen could strengthen further aided by both risk
aversion flows and the nagging issue of yuan revaluation," said Boris
Schlossberg, director of currency research at GFT.
"Unless the dollar strengthens materially, providing some relief for export-
led Asian economies and the Europeans we think the yuan revalue story will
persist and the Chinese will have to respond to world pressure even if the move
may be largely ceremonial rather than economic," he wrote in emailed comments.
On Wednesday, the dollar headed lower versus the euro and other major
counterparts, falling for the third session in four, as a surprisingly weak
report on U.S. housing starts and comments from a Federal Reserve policy maker
solidified expectations that interest rates would remain low for some time.
(END) Dow Jones Newswires
11-19-090346ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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