Dollar steady in Asian trade

Dollar steady in Asian trade


Tokyo: The dollar was steady in Asian trade on Monday, 27 August, as investors returned to risky bets after strong US data eased fears of a global credit crunch, dealers said.

The greenback slipped to 116.22 yen in Tokyo afternoon trade from 116.41 in New York late Friday.

The euro was steady at 1.3673 dollars but eased to 158.88 yen from 159.24.

NAB Capital strategist John Kyriakopoulos said the market was seeing a “recovery in investor risk appetite and carry trades."

A carry trade is when the yen is used as a source of low-cost funding for higher-yielding assets elsewhere. Japan has the lowest interest rates of any major economy.

The yen was also softer against high-yielding currencies. The Australian dollar firmed to 96.69 yen from 95.35 and the British pound to 234.22 yen from 233.62.

Global markets have been in turmoil in recent weeks over problems in the US home loan market, where borrowers with shaky credit histories defaulted on mortgages, raising fears of a liquidity shortage as investors scramble to cover losses.

But anxiety eased after surprisingly strong US economic news. The US government on Friday said new home sales rose 2.8% in July; most analysts had expected sales to decline.

The dollar slipped to 938.60 South Korean won from 942.05, to 46.65 Philippine pesos from 46.77, to 9,382.50 Indonesian rupiah from 9,410, and to 1.5192 Singapore dollars from 1.5238.

The greenback firmed to 32.98 Thai baht from 32.44 and was stable at 32.96 Taiwan dollars.