• search

Array

Written by: Staff
Subscribe to Oneindia News

SINGAPORE, May 4 (Reuters) The dollar stuck to a narrow range on Thursday, having failed to gain any lasting support from firm U.S.

data or supportive comments from Japanese officials.

Traders said the euro may benefit from a European Central Bank meeting later in the day. The ECB is expected to take a hawkish tone, paving the way for a likely interest-rate rise in June.

The dollar briefly spiked higher after Japan's finance minister said overnight that financial markets had misunderstood a G7 statement that investors had taken as a call for the dollar to weaken.

The euro hovered at $1.2630, little changed from New York's $1.2626 close. Activity was again thin with Japan off on holiday.

Japan markets resume trading on Monday.

The euro had dipped as low as $1.2589 in New York after a strong survey of the U.S. service sector and a sharp fall in weekly jobless claims lifted the dollar. Yet the fall was brief, leaving the recent $1.2556-$1.2690 range intact.

Dealers said strong economic data had not changed a view in the market that a pause in U.S. rate increases would occur soon.

''U.S. dollar sentiment in the past few sessions has been very poor and momentum has been strong for it to decline,'' said Sue Trinh, senior currency strategist at Royal Bank of Canada.

''The markets should consolidate today, but we've got the ECB meeting and that is potentially bearish for the dollar as Trichet is likely to maintain a hawkish line,'' she said, referring to ECB President Jean-Claude Trichet.

The ECB is expected to keep rates on hold at 2.5 percent later on Thursday, but signal a rate rise for its June meeting.

TANIGAKI CAUSES STIR The dollar briefly spiked to 113.88 yen following a remark by Japan's finance minister, Sadakazu Tanigaki, that last month's G7 statement did not mean the dollar needed to decline.

He told reporters in Hyderabad, India, where he is attending an annual meeting of the Asian Development Bank, that currencies should reflect economic fundamentals and any excessive movements were undesirable.

However, after the brief spike higher, the dollar settled back in Asian trading to 113.63 yen, having failed to clear resistance around 114.00.

''It seems at the moment that the market is so dollar-bearish that it doesn't really matter what news we see,'' said Sean Comber, an analyst at ANZ Investment Bank.

''Nevertheless, given the depth of negative sentiment towards the dollar, and the fact that currencies do not extend down in linear moves, prospects are now for a short-dated squeeze up in the dollar,'' he added.

A positive surprise from U.S. payrolls report on Friday could be the catalyst for such a squeeze, Comber said.

Elsewhere, the dollar was steady at 1.2364 Swiss francs, while sterling edged back from Wednesday's eight-month highs to trade easier at $1.8398.

The New Zealand dollar was trading at $0.6389, recouping most of the losses incurred after reports of an earthquake measuring 8.1 hit the Tonga Islands. The quake initially prompted a tsunami warning for Fiji and New Zealand, although the Pacific Tsunami Warning Center later cancelled the warning.

The Australian dollar remained firm at $0.7685 having touched a fresh seven-month peak around $0.7718 overnight following the Reserve Bank of Australia's interest rate hike.

Currency bid prices at 0222GMT. All data taken from Reuters with percent change calculated from the daily U.S. close at 2130GMT.

Last US Close %Chg YTD % 2005 Cls .

Euro/dlr 1.2628 1.2626 +0.02 +6.82 1.1822 Dlr/yen 113.70 113.67 +0.03 -3.56 117.90 Euro/yen 143.60 143.58 +0.01 +3.00 139.42 Dlr/swiss 1.2369 1.2364 +0.04 -5.86 1.3139 Stg/dlr 1.8398 1.8420 -0.12 +6.79 1.7228 Dlr/can 1.1092 1.1079 +0.12 -4.84 1.1656 Aus/dlr 0.7685 0.7701 -0.21 +4.86 0.7329 uro/swiss 1.5623 1.5612 +0.07 +0.58 1.5533 Euro/stg 0.6863 0.6853 +0.15 +0.03 0.6861 REUTERS CS GC0949

For Breaking News from Oneindia
Get instant news updates throughout the day.

X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Oneindia sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Oneindia website. However, you can change your cookie settings at any time. Learn more