Forex - US dollar higher in Sydney after benign session overnight

Forex - US dollar higher in Sydney after benign session overnight

	Published : Fri, 23 Nov 2007 00:25 By : Agencies Print this Story

SYDNEY (Thomson Financial) - The US dollar was slightly higher against major currencies in midmorning trade in Sydney Friday

after a benign session overnight, with US markets closed for the Thanksgiving Day holiday and some currency traders taking a breather.

Lackluster trading helped relieve pressure on the greenback, which has been losing support due to concerns about the outlook for US economic growth and the fallout from the subprime lending crisis.

''The US Thanksgiving Day holiday contributed to relatively steady currencies in overnight trading with no US equity market action to contribute to volatility,'' said John Kyriakopoulos, head of currency trading at National Australia Bank.

Volumes will remain light today with Japanese markets closed for the Labor Thanksgiving Day.

At 10.10 am (2310 GMT), one US dollar was buying 108.55 yen compared with 108.53 yen in late European trade.

The euro was slightly lower at 1.4848 dollars from 1.4854 dollars. The euro finished Thursday's session steady against the greenback after European Central Bank president Jean-Claude Trichet protested against ''abrupt, rapid and brutal movements'' in exchange rates.

The sterling was at 2.0616 dollars, down from 2.0627 dollars last night.

Elsewhere, the Australian dollar was doing 87.22 US cents after sinking as low as 86.99 cents overnight, before settling at 87.05 cents.

Volatility is expected to return to the currency markets next week and continue for the rest of the year as trading volumes decline.

Thin trading and nervous investors could be ''an explosive cocktail'' for sharp movements in the market, said Ian Copsey, senior financial analyst at Global Forex Trading.

''Central banks will be loathe to be the catalyst for such a move but they could well consider intervention if they thought there was a risk of a period of instability and excessive moves,'' Copsey said.

''Within this we should remember the market is heavily short in dollars, concentrating on the US woes but have given scant attention to the sharper than expected slowdown in the European economy.'

Sydney 10.10 am (2310 GMT)

US dollar

108.55 yen

1.1012 sfr

Euro

1.4848 usd

161.14 yen

1.6351 sfr

0.7202 stg

Sterling

2.0616 usd

223.739 yen

2.26991 sfr

Australian dollar

0.8722 usd

0.4231 stg

94.66 yen

New Zealand dollar

0.7526 usd

allison.jackson@thomson.com

aj/ms

bhx/ms

The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.