Dollar down in Asian trade

June 3, 2009

, TOKYO, Jun 3 – The dollar softened in Asian trade Wednesday as investors weighed hopes for a global recovery with worries over America\’s long-term economic health, dealers said.

The dollar softened to 95.66 yen in Tokyo afternoon trade from 95.72 in New York late Tuesday.

The euro gained to 1.4313 dollars from 1.4305, nearing an all-time high since the beginning of the year. It weakened to 136.89 yen from 136.95.

The greenback will likely drift lower as investors unwind risky positions, Hachijuni Bank forex strategist Sho Komamura said, and faces continuing pressure over the health of the US economy.

"It\’s hard to actively buy the dollar," he said.

Fears of a weak dollar and a ballooning US budget deficit have prompted Russia and China to express concern over the greenback\’s status as the world\’s reserve currency, as the countries are some of the largest holders of US debt.

There is speculation that a BRIC summit — representing the key emerging markets of Brazil, Russia, India and China — this month may discuss the idea of a "supranational" world currency, dealers said.

Few in the market expect the dollar will quickly lose its status as a global reserve currency.

However, NAB Capital strategists said, "There\’s little doubt that China and other large emerging economies are strongly committed to a much reduced role for the dollar as a reserve currency in coming years."

Meanwhile markets awaited monetary policy meetings in Europe on Thursday.

Players are waiting on the European Central Bank\’s details of a plan to buy corporate bonds to shore up credit in major European markets.

The Bank of England is to meet on the same day and is expected to keep interest rates at a record low 0.5 percent.

The dollar fell to 10,170 Indonesian rupiah from 10,244.38, to 1.4355 Singapore dollars from 1.4404, to 1,235.45 South Korean won from 1,239.03 and to 34.01 Thai baht from 34.13.

It was higher at 47.22 Philippine pesos from 47.11 and at 32.49 Taiwan dollars from 32.28.


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