Investors await developments on Irish-debt situation
By Lisa Twaronite, MarketWatch
TOKYO (MarketWatch) — The dollar gained in Asian trading Wednesday as the European unit edged down, with investors awaiting further developments on the Irish debt situation.
Ireland’s prime minister hadn’t applied for external aid, and had said the country is projected to have enough cash on hand to meet its funding needs through the middle of next year. Read more on Ireland’s debt crisis.
But media reports said some bailout deal is likely. Irish authorities will meet with officials from the European Union, International Monetary Fund and European Central Bank for more consultations on the country’s continuing banking-sector risks. Read more on Ireland, EU, IMF bank talks.
The U.S. dollar index (DXY 79.14, -0.07, -0.09%) , which measures the greenback against a basket of six major currencies, rose to 79.321 from 79.215 in late North American trading on Tuesday.
The euro (EURUSD 1.3508, +0.0021, +0.1557%) slipped to $1.3483 from $1.3493 late Tuesday. The British pound (GBPUSD 1.5914, +0.0029, +0.1826%) fell to $1.5867 from $1.5882.
Part of the dollar’s rise this week was due to rising Treasury yields. While yields — which move inversely to prices — fell Tuesday, the yield on the benchmark 10-year note had its biggest gain since June 2009 in the previous session.
That happened despite the U.S. Federal Reserve’s $600 billion bond-buying program, its second round of such quantitative easing, called QE2.
“One inadvertent significant beneficiary of QE2, or, rather, its failure to keep U.S. yields down, has been Japan,” said Uwe Parpart, chief Asia strategist at Cantor Fitzgerald. “Yen strength is slowly fading as the yield differential between U.S. and Japanese government bonds grows,” he said in emailed comments.
Against the Japanese yen, the dollar (USDYEN 83.4300, +0.1500, +0.1801%) rose to ¥83.43 from ¥83.31 late Tuesday.
