Forex - US dollar mixed in Sydney morning trade after slipping overnight

Forex - US dollar mixed in Sydney morning trade after slipping overnight

	Published : Fri, 12 Oct 2007 01:41 By : Agencies Print this Story

SYDNEY (Thomson Financial) - The US dollar was mixed against other major currencies in midmorning trade Friday after slipping overnight as strong gains in Asian equity markets and dovish comments from the Bank of Japan Thursday fueled yen-funded carry trades, indicating a renewed appetite for risky assets.

A retreat on Wall Street overnight saw the greenback claw back some of its early losses.

'Expectations for the US to cut rates further to shield the economy from the housing recession and credit market woes, the Bank of Japan keeping interest rates steady at just 0.5 percent for an eighth straight month, and the South African Reserve Bank hiking rates by 50 basis points to 10.5 percent all boosted carry trade demand,' National Australia Bank head of currency strategy John Kyriakopoulos said.

At 10.05 am (0005 GMT), one dollar was buying 117.42 yen, after hitting an overnight high of 117.49 yen before settling at 117.20 yen in late New York trade.

The euro was at 1.4206 dollars, up from 1.4195 dollars in New York after peaking at 1.4260 dollars.

The Australian dollar was a star performer Thursday, surging to 90.61 US cents on roaring carry-trade demand, the highest level since the Aussie floated in 1984.

Expectations for another rate hike this year intensified Thursday after Australia's unemployment rate fell to a fresh 33-year low of 4.2 percent, which is supporting the currency as investors go looking for higher-yielding assets.

John Noonan, an analyst at Thomson IFR, said investors' appetite for risk remains robust despite the Dow Jones industrials closing in negative territory for the past two sessions.

''There is an optimistic view that even if the US economy weakens, the Fed will do whatever is needed to keep the economy on track,'' Noonan said.

Kyriakopoulos said the timing and size of future rate cuts could be influenced by the US September retail sales figures, due to be released later Friday, which will provide an 'update on the health of the consumer in the wake of the credit crunch'.

Sydney at 10.05 am (0005 GMT)

US dollar

117.42 yen

1.1816 sfr

Euro

1.4206 usd

166.79 yen

1.6789 sfr

0.6987 stg

Sterling

2.0333 usd

238.779 yen

2.40252 sfr

Australian dollar

0.9023 usd

0.4437 stg

105.965 yen

New Zealand dollar

0.7728 usd

allison.jackson@thomson.com

bhx/jm/ms

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