SF: Dollar Rises Versus Yen as U.S. Growth Slows Less Than Forecast
Aug. 27 (Bloomberg) -- The dollar rose against the yen after a report showed the U.S. economy growth slowed less than forecast in the second quarter.
"The strength in the dollar, strength in commodity currencies, the weakness in the yen is probably relief that we've avoided the worst outcome," said Nick Bennenbroek, head of currency strategy at Wells Fargo & Co. in New York.
The greenback headed for a second weekly loss against the yen amid speculation Federal Reserve Chairman Ben S. Bernanke will signal measures to stimulate the economy when he speaks today at a conference. The yen fell against most of its major counterparts as Prime Minister Naoto Kan said Japan is willing to take "bold" action to reduce the currency's value.
The greenback rose 0.6 percent to 84.94 yen, from 84.45 yen, and was poised for a weekly loss of 1 percent. The dollar slipped 0.1 percent to $1.2732 per euro at 8:45 a.m. in New York, from $1.2716 yesterday. The Japanese currency fell 0.7 percent to 108.12 yen per euro, from 107.39.
The revised increase in U.S. gross domestic product was an annual pace of 1.6 percent, more than the median forecast of economists surveyed by Bloomberg News, and compares with a 2.4 percent estimate issued last month, figures from the Commerce Department showed today in Washington. Corporate profits climbed.
Bernanke will speak at 10 a.m. New York time at an annual Fed symposium in Jackson Hole, Wyoming.
"The dominant sentiment in the charts since early afternoon Wednesday has been 'wait for Friday.'" Jim Vogel, head of agency-debt research at FTN Financial in Memphis, Tennessee, wrote today in a note to clients. "Traders want to hear Bernanke and read his tone."
The Fed said in a policy statement on Aug. 10 that U.S. growth would be slower than anticipated and announced it would buy Treasuries to set a $2.05 trillion floor on its balance sheet and keep interest rates from rising.
