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Forex - Dollar falls as yen rebounds, equities rally

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Shutterstock photo - The U.S. dollar fell against most major currencies on Tuesday after the yen rebounded from a selloff stemming from the Bank of Japan's launch of its large stimulus program.

Rising equities prices in the U.S. enticed investors out of the safety of the greenback as well.

In U.S. trading on Tuesday, EUR/USD was up 0.67% at 1.3094, while USD/JPY was trading down 0.07% 99.31.

The yen weakened to 4-year lows against the greenback after the Bank of Japan began stimulating its economy via the purchase of JPY1.2 trillion in Japanese government debt maturing in five years or more.

The move forms part of the Bank of Japan's plan to double its asset-purchasing program over the next two years and extend the maturities of the bonds it purchases as part of a larger strategy to hit a 2% inflation target.

The euro and other currencies served as the beneficiaries to the yen's plunge, which sent the single currency also gaining against the dollar.

The yen, however rebounded against the dollar on Tuesday after investors viewed the currency as oversold.

Elsewhere, rising stock prices also pushed the dollar lower as investors took on risk.

U.S. metals giant Alcoa reported on Monday after the closing bell that it earned during the first quarter of 2013 USD0.11 per share, beating expectations of USD0.08 per share.

Revenue came in at USD5.83 billion, below expectations of USD5.88 billion.

Alcoa's earnings kick off the quarterly reporting season and cautious hopes for modest gains in profits sent stocks rising and the dollar dipping.

The greenback, meanwhile, was down against the pound, with GBP/USD trading up 0.56% at 1.5339, and down against the Swiss franc, with USD/CHF trading down 0.37% at 0.9319.

In the U.K., data revealed that manufacturing production rose by 0.8% in February, beating expectations for a 0.3% gain, while industrial production rose 1.0% compared to expectations for a 0.3% increase, which bolstered Cable.

Elsewhere, the U.K. trade deficit widened to GBP 9.4 billion in February from GBP8.2 billion in January, surpassing expectations for a deficit of GBP8.6 billion.

The dollar was down against its counterparts in Canada, Australia and New Zealand, with USD/CAD down 0.16% at 1.0152, AUD/USD up 0.89% at 1.0506 and NZD/USD trading up 0.80% at 0.8528.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.57% at 82.40.

On Wednesday in the U.S., the Federal Reserve is to publish the minutes of its most recent policy meeting, while the government is to release data on the federal budget balance. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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