Dollar Weakens in Asia After US Economic Data

By webadmin on 11:09 am Aug 30, 2012
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The dollar weakened in Asia Thursday after new US data gave a cautious view of the world’s largest economy while markets awaited a speech by the US central bank chief for signs of fresh stimulus.

The greenback dipped to 78.65 yen against 78.70 yen in New York trade late Wednesday, while it also weakened against the euro with the common currency buying $1.2534 from $1.2526 in US trade.

The euro bought 98.60 yen in Tokyo, from 98.61 yen in New York.

The US dollar won an initial boost after second-quarter US economic growth figures were revised upward to 1.7 percent from 1.5 percent on Wednesday, while pending home sales data for July also came in strong.

But the US Federal Reserve’s Beige Book survey of regional economies gave a slightly less rosy picture of growth.

Investors were also waiting for clues on the Fed’s assessment of the US economy as chairman Ben Bernanke prepares to deliver a speech at an economic symposium in Jackson Hole, Wyoming, on Friday.

“Overall, we have a picture of an economy that is not showing risk of dropping into ‘stall speed’ but neither is growth accelerating from the 1.5-2.0 percent growth rate of the first half of the year,” National Australia Bank said in a note.

European Central Bank chief Mario Draghi, meanwhile, hit back at criticism of his efforts so far to battle the eurozone debt crisis.

Draghi has vowed to defend the euro at all costs with rising speculation that the bank would restart a bond-buying programme to help bring down borrowing costs for debt-hit countries in the 17-nation eurozone.

“The ECB will do what is necessary to ensure price stability. It will remain independent. And it will always act within its mandate,” he wrote in an article to German weekly Die Zeit.

“Yet it should be understood that fulfilling our mandate sometimes requires us to go beyond standard monetary policy tools,” he added.

But it was uncertain what further steps the ECB, which holds a policy meeting next week, would take, said Hiromichi Shirakawa, analyst at Credit Suisse in Tokyo.

“It is still unclear how far the ECB could go,” he said in a note.

Agence France-Presse