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Dollar steadies before Japan, US holidays

Written by: Staff

TOKYO, Nov 22 (Reuters) The dollar shuffled in narrow ranges in thin trading on Wednesday in the absence of key economic data and ahead of holidays the next day in both Japan and the United States.

The dollar edged down on Tuesday as the White House lowered its forecast for U.S. economic growth this year and next, saying the economy is moderating.

Some traders said that many exporter orders now appeared set at lower dollar/yen levels than before, reflecting growing wariness of the U.S. currency's downside risks.

''The dollar is increasingly top-heavy with players gradually lowering the upper end of their trading ranges,'' said a trader at a Japanese bank.

In early Tokyo trade, the dollar inched down to 117.85 yen from around 117.90 yen late in U.S. trade.

The dollar quickly erased a slight gain made on data showing that Japan's trade surplus fell 24.8 percent in October from a year earlier.

The euro dipped to 151.35 yen but stayed in sight of a record high of 151.68 yen hit on electronic trading platform EBS at the start of the week.

The single European currency was little changed at $1.2845.

Traders said the dollar could get some support if Japan's monthly report on the economy, due later in the session, raises concerns about growth prospects.

The government will downgrade its view on the economy in the report, mainly due to sluggishness in personal consumption, government sources said. It would be the first downgrade in almost two years.

''If the monthly report raises question about growth prospects, the yen may come under pressure because players would sense a difference in views between the government and the Bank of Japan,'' said the trader at the Japanese bank.

The BOJ is widely expected to raise interest rates from the current 0.25 percent by the March end of the current fiscal year, with some traders seeing the possibility of a rate rise next month if upcoming data is strong.


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