MW: Dollar mostly higher as Bank of Japan ponders more easingQ
Malaysia's ringgit jumps to 13-year high on Chinese trade plan
By William L. Watts, MarketWatch
LONDON (MarketWatch) -- The dollar moved higher against most major currencies in quiet trading Thursday, gaining on both Japan's yen and the euro.
The dollar index (DXY 82.34, +0.12, +0.15%) , a measure of the performance of the greenback against a basket of major currencies, rose to 82.37 from 82.17 late Wednesday.
Currency traders keyed on reports that the Bank of Japan is pondering further easing of monetary policy and on ongoing qualms about debt problems among the so-called peripheral countries of the euro zone.
Strategists at UBS said selling pressure on the European single currency stemmed in part from an article in Germany's Der Spiegel magazine highlighting the impact of austerity measures implemented in Greece on the nation's economy and noting that social tensions are on the rise.
Greece reported economic data last week that showed the recession deepened in the second quarter, contracting 1.5%, while unemployment rose. Read story on Greek GDP.
The euro (EURUSD 1.2829, -0.0026, -0.2023%) traded at $1.2845, down from $1.2878 in late North American trading on Wednesday. The euro (EURYEN 109.7500, +0.0100, +0.0091%) bought 109.86 yen, down from ¥109.94.
Meanwhile, Japanese daily Sankei Shimbun reported the Bank of Japan will consider taking additional policy-easing steps to cope with a recently rising yen and falling share prices.
Against the Japanese currency, the dollar (USDYEN 85.5600, +0.2000, +0.2343%) rose to ¥85.54, up from ¥85.34 late Wednesday.
Still, Trade Minister Masayuki Naoshima told reporters Thursday that the current dollar level of around ¥85 is "very painful" to Japanese companies because their assumed exchange rate is ¥90.00, business daily Nikkei reported.
Sterling on the rebound
The British pound (GBPUSD 1.5624, +0.0028, +0.1795%) , meanwhile, rebounded strongly from an early dip into negative territory below $1.55, reversing direction after July retail sales showed a much stronger-than-expected 1.1% increase. Economists had forecast 0.6% monthly growth.
The pound traded at $1.5646 in recent action, up from $1.5619 late Wednesday. The euro fell 0.4% to change hands at 81.98 pence.
A foreign-exchange standout, the Malaysian ringgit (USDMYR 3.1550, -0.0180, -0.5673%) soared to a nearly 13-year high against the U.S. currency. The ringgit changed hands at 3.1325 per dollar in recent trade, a gain of 0.5%.
The move came after China allowed domestic trading of the yuan versus the ringgit for the first time. Also, Malaysia's central bank announced it had lifted restrictions such that the ringgit can be used as a currency of settlement for international trade.
Meanwhile, strategists at advisory firm MoneyCorp warned that summer trading was likely to remain thin and erratic.
"Currency movements so far this week have been largely the result of sentiment, fad and seasonal illiquidity," they said, in a research note. "There has been little evidence of cause-and-effect to connect the economic data to price action. There is no reason why that should change today, in the middle of the northern hemisphere's favorite holiday month."
