Forex - Yen falls further, lifts euro, dollar to session highs |
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Thu, 08 Feb 2007 09:17
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SINGAPORE (XFN-ASIA) - A weak Japanese yen propelled the US dollar and the euro higher in Asia and both currencies rose to session highs in the afternoon, with the euro particularly buoyant ahead of tonight's European Central Bank meeting.The ECB is widely expected to keep the official refinance rate at 3.5 pct tonight.The Bank of England, which meets today, is also expected to keep UK rates on hold at 5.25 pct.But dealers said the euro could gather additional support tonight if ECB president Jean-Claude Trichet signals further rate hikes ahead in his monetary outlook statement and his post-meeting press briefing.'Going by tradition, the 'vigilance' code will be invoked today, if there is an intention to raise the refi target next month to 3.75 pct,' DBS analysts said.'As usual, watch Trichet's lips.'Ahead of the ECB meeting, the euro notched up fairly strong gains on the yen, breaking above the overnight high of 157.25 yen to 157.40 yen, after starting near 156.98 yen in the morning.The cross extended its gains to 157.76 yen as the European session got underway, with the Japanese currency also pressured by comments by Bank of Japan board member Hidehiku Haru, who said the BOJ is in no hurry to raise interest rates.Ahead of the next BOJ policy-setting meeting on Feb 20-21, Haru also said he is still 'undecided' on what to vote for and wished to 'make up my mind by analyzing various economic data and information thoroughly and having a firm discussion with other policy board members at the meeting.'Dollar-yen, which had also broken higher soon after the Tokyo fixing, headed to a 120.92 yen high this morning. The pair was then lifted past 121.00 yen for a peak of 121.15 yen in line with the late cross surge.'The market is currently pricing in less than even odds that the BOJ will lift rates on Feb 21,' UBS strategist Ashley Davies wrote in a note.'We maintain a negative stance on yen over the short-term and target dollar-yen at 121.00 yen over 1 month.'Euro-dollar, meanwhile, traded in a generally choppy manner between 1.3010 usd and 1.3025 usd in the morning in Asia and slightly extended the upside to a 1.3028 usd high in late dealings.Singapore 3.28 pm (GMT 0728) vs Sydney 2.11 pm (0311 GMT)US dollaryen 121.15 up from 120.88sfr 1.2458 up from 1.2422Eurousd 1.3007 down from 1.3017yen 157.60 up from 157.34sfr 1.6208 up from 1.6167stg 0.6604 unchangedSterlingusd 1.9694 down from 1.9710yen 238.61 up from 238.18sfr 2.4534 up from 2.4476Australian dollarusd 0.7800 down from 0.7809stg 0.3961 unchangedyen 94.49 up from 94.350New Zealand dollarusd 0.6866 down from 0.6875singapore@xfn.com
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Forex - US dollar, euro slip as yen rebounds in Singapore afternoon trade 