Forex - US dollar little changed in Sydney morning trade; support remains |
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Mon, 22 Jan 2007 00:22
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SYDNEY (XFN-ASIA) - The US dollar was relatively unchanged here against the yen and euro as traders continue to support the US currency following a week of stronger-than-expected US economic data, dealers said.This included the release of firmer consumer and producer price data for December which reduced the likelihood of Federal Reserve rate cuts in the short-term, boosting yield support for the US dollar.At 9:48 am (2248 GMT Sunday), the dollar was at 121.23 yen from 121.24 in late New York trading on Friday while the euro was at 1.2956 usd, slightly lower from 1.2959 in New York.Dealers said the US dollar rose in overnight trading on Friday despite losing most of the currency's gains later in the trading session as traders squared positions ahead of the weekend.NAB Capital strategists said one reason the US dollar has not risen more following a recent string of upbeat economic reports is that traders are still looking for a Federal Reserve interest rate cut at the end of 2007, while expecting further interest rate increases in the euro zone, UK, Australia and New Zealand.'This suggests that further gains in the US dollar will rest on traders completely pricing out Fed interest rate cuts and/or an unwinding of expectations for interest rate hikes elsewhere,' they said.Dealers said the run of positive US data continued on Friday with the latest University of Michigan consumer confidence survey jumping to a three-year high of 98.0 index points in January from 91.7 in December. The outcome was above the market consensus for an increase to 92.2 index points.Meanwhile, dealers said Federal Reserve president Jeffrey Lacker commented on Friday that inflation was still a predominant risk for US policy makers as the recent slowing may prove to be temporary.Commonwealth Bank senior economist Michael Workman said with signs of stabilization in housing and manufacturing, and with the US consumer still resilient, the US economic outlook is looking markedly healthier.'As we have been saying for some time, we see little scope for rate cuts in the near future. The near term risk for interest rates is increasingly moving towards the upside,' he said.Dealers said tonight's US leading indicator for December is likely to provide the most focus for traders, but attention is likely to be looking ahead to US existing home sales and new home sales for December due for release of Thursday and Friday respectively.Sydney 9.48 am (2248 GMT Sunday)US dollar121.23 yen1.2483 sfrEuro1.2956 usd157.11 yen1.6179 sfr0.6565 stgSterling1.9739 usd239.29 yen2.4641 sfrAustralian dollar0.7889 usd0.3996 stg95.620 yenNew Zealand dollar0.6949 usdpaul.daniel@xfn.com
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Forex - US dollar steady in Sydney morning trade after rally on trade data 