MW: U.S. dollar slips, but holds ground against yen
By Myra P. Saefong, MarketWatch
TOKYO (MarketWatch) — The U.S. dollar edged lower against its currency rivals in Asia’s Friday afternoon trading, but the greenback held its ground against the Japanese yen as traders mulled the potential for further currency market intervention by Japanese authorities.
The dollar index (DXY 81.00, -0.24, -0.29%) , which tracks the performance of the greenback against a basket of six major currencies, fell to 80.969, down from 81.239 late Thursday in North American trading.
“While the market is still trying to digest the news of the [Bank of Japan’s] first intervention in currency markets in six years, the economic fundamentals have not changed much since the beginning of the week,” said Yuki Sakasai, an analyst at Barclays Capital, in a note to clients issued Friday afternoon.
“Although the unilateral intervention has been effective so far in preventing further JPY strength, it is ultimately economic fundamentals, in particular interest rate differentials, that will determine the trend in USD/JPY,” she said. “In this regard, expectations of further easing by the Fed will be the key for the medium-term prospect of USD/JPY, in our view.”
In recent dealings, the dollar (USDYEN 85.6900, -0.0800, -0.0933%) stood at ¥85.71 compared with ¥85.78 late Thursday.
On Thursday, the dollar fell to its lowest level against the
euro in more than a month after a strong debt auction in Spain relieved some investors’ concerns about the countries’ ability to access capital markets. See Thursday’s Currencies Report.
