Forex - US dollar mixed in Sydney morning; range trading until FOMC decision

Forex - US dollar mixed in Sydney morning; range trading until FOMC decision

	Published : Wed, 31 Jan 2007 00:35 By : Agencies Print this Story

SYDNEY (XFN-ASIA) - The US dollar was firmer against the yen here and lower against the euro as range trading is expected to continue until the conclusion of the Federal Open Market Committee meeting tonight, dealers said.

They said focus will be on the Federal Reserve's outlook for inflation given the widely held forecast for the Federal funds rate to remain at 5.25 pct tonight, while advance December quarter gross domestic product data will also dictate trading ahead.

At 10:09 am Sydney time (2309 GMT Tuesday), the dollar was at 121.72 yen from 121.61 in late New York trading while the euro was at 1.2965 usd, up from 1.2962 in New York.

Dealers said currencies held in tight ranges in overnight trading as investors awaited tonight's FOMC decision.

NAB Capital strategists said the US dollar/yen pair continues to be supported by euro zone ministers talking about their concerns for yen weakness, with German finance minister Peer Steinbrueck commenting overnight that the yen will be discussed at next week's G7 meeting.

The strategists noted that Japanese buyers of the yen are capping gains in the US dollar above 122.0 yen.

Meanwhile, dealers said the improved US consumer confidence for January had little impact on currency trading overnight, rising to 110.3 index points from an upwardly revised 110.0 in December and is now at its highest level since early 2002.

They said tonight's release of the ADP private employment survey for January is likely to provide a preview of the key non-farm payrolls data due on Friday, while the employment cost index for the fourth quarter also released tonight is expected to highlight the labor market inflationary pressures that currently concern the Federal Reserve.

Sydney 10:09 am (2309 GMT Tuesday)

US dollar

121.72 yen

1.2517 sfr

Euro

1.2965 usd

157.79 yen

1.6233 sfr

0.6607 stg

Sterling

1.9625 usd

238.85 yen

2.4564 sfr

Australian dollar

0.7718 usd

0.3933 stg

93.970 yen

New Zealand dollar

0.6867 usd

paul.daniel@xfn.com