Dollar remains rangebound as markets head for weekend
February 18, 2005
Tokyo - The dollar was little changed in thin Asian trade Friday after US Federal Reserve Chairman Alan Greenspan's less optimistic comments on the massive US current account deficit hurt the unit, dealers said.
They said there were no fresh leads in Asian trade, with market participants staying on the sidelines ahead of a long holiday weekend in the United States.
The dollar edged down to ¥105.45 in Tokyo afternoon trade from ¥105.51 in New York late Thursday.
The euro eased to $1.3065 from $1.3069 and to ¥137.77 from ¥137.95.
"The dollar was hardly moving against the yen due to a lack of new leads," said Tetsuya Aida, a currency dealer at Bank of Tokyo-Mitsubishi.
"Trading was very thin as few participated in the market ahead of a long weekend in the US," Aida said.
US markets will be closed for a public holiday on Monday.
Going forward, the market may shift its focus to US-Japan interest-rate differentials, which could boost the dollar over the short term, said Shigetake Nakayama, a currency dealer at UFJ Bank.
Interest rates in the United States are expected to rise, making the dollar more attractive to investors.
But the longer-term trend for the US currency appeared to be downward, he said.
"The US current account and budget deficits will remain a major issue for the market. With no quick fix in sight I believe market participants will eventually test the dollar's downside," Nakayama said.
In early afternoon trade, the dollar fell to 9289 Indonesian rupiah from 9290, to 1025.3 South Korean won from 1025.7, to 54.665 Philippine pesos from 54.850 and 31.543 Taiwan dollars from 31.550.
The dollar climbed to 1.6415 Singapore dollars from 1.6403 and 38.580 Thai baht from 35.535. - AFP
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