Dollar eases against yen and euro in Asia

August 30, 2013
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Dollar eases against yen and euro in Asia/AFP
Dollar eases against yen and euro in Asia/AFP

, TOKYO, August 30- The dollar edged lower in Asian trade Friday following better than expected US growth data and easing concerns about an imminent US led strike on Syria.

The greenback also moderated against the rupee as India’s central bank moved to support the troubled currency after it had slumped to record lows, while a rate hike in Indonesia provided some support to the rupiah.

In afternoon trade in Tokyo Friday, the euro was at $1.3242, a tad up from $1.3241 in New York Thursday, while the dollar bought 98.26 yen, compared with 98.32 yen. The euro fetched 130.09 yen against 130.18 yen.

The rupee, which has had a volatile few weeks, sat at 66.72 to the dollar, an improvement on the levels near 69 seen on Wednesday. The dollar bought 10,920 rupiah, down from more than 11,000 this week, after Bank Indonesia raised rates 50 basis points late Thursday.

In Washington the Commerce Department said the US economy grew an annualised 2.5 percent in the second quarter, well above the 1.7 percent originally estimated and better than the 2.1 percent revision broadly expected.

However, while the figures show the world’s number one economy picking up, analysts said they raise the likelihood the US Federal Reserve will soon begin to wind down its $85 billion a month stimulus scheme.

Expectations of a taper of the programme have sent equities and currencies in emerging markets plunging as the foreign investment splurge it fuelled is reversed.

Sentiment in higher risk currencies has also been given a boost as a US led attack on Syria looked less imminent after lawmakers in London voted against such a move.

And while the White House signalled it was ready to go it alone in punishing Syria for a deadly chemical attack on its civilians, analysts said they did not expect a strike this weekend, as was initially thought

Traders seemed unmoved by news that Japanese consumer prices had risen at their fastest rate in almost five years.

July Consumer Price Index (CPI) and employment data were better than expected but weak household spending offset the positive results, Takafumi Yamawaki, chief rates strategist at JPMorgan Securities Japan told Dow Jones Newswires.

“CPI is rising in line with the Bank of Japan’s forecasts and the BoJ will likely maintain its bullish economic outlook However, I don’t think the CPI will continue to rise at [the] current pace as the increase was primarily due to higher fuel prices,” Yamawaki said.

Other Asian currencies were mixed against the dollar.

It fell to 1,109.25 South Korean won from 1,109.86 won Thursday and to 32.10 Thai baht from 32.17 baht.

But the greenback rose to Sg$1.2757 from Sg$1.2753 and to 44.63 Philippine peso from 44.57 peso while it was unchanged at Tw$29.92.

The Australian dollar fell to 89.38 US cents from 89.75 and the Chinese yuan rose to 16.06 yen from 15.98 yen.

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