Forex - US dollar lower early in Asian session as traders keep eye on equities
July 29, 2007 – 9:31 pmSYDNEY (Thomson Financial) - The US dollar was lower against the yen and euro early in Asian trading hours Monday as currency markets remained focussed on developments in equity markets around the world.
Trading this week is expected to reflect whether the slide in share prices on Wall Street gathers momentum, which would likely reduce carry trades but generally support the greenback as investors switch to safer assets such as US Treasuries. At 9.53 am here (2353 GMT Sunday), the dollar was at 118.35 yen, down from 118.46 yen in late trading in New York Friday. The euro was at 1.3640 dollars, up from 1.3618 dollars in New York.
Friday’s rise in the US dollar rise was aided by data showing the US economy grew at an annual rate of 3.4 percent in the second quarter, the fastest rate in five quarters.
The Federal Reserve’s preferred measure of inflation, the core personal consumption expenditure price index, rose 1.4 percent in the second quarter, rising at its slowest pace since the second quarter of 2003.
NAB Capital said it doubted whether these data would change the mood in equity markets if credit spreads kept widening.
‘Solid US non-farm payrolls growth of 130,000 in July is expected Friday. However, [the] pending home sales for June, due Wednesday, risk exacerbating concerns over the housing slump,’ NAB Capital said.
Source: AFX News Limited
