MW: Dollar slips against all but yen in Asia trade
By William L. Watts and Lisa Twaronite, MarketWatch
LONDON (MarketWatch) — The U.S. dollar fell versus most major rivals, while the euro found support after the governor of Ireland’s central bank said Dublin was likely to accept a European Union-International Monetary Fund loan worth “tens of billions” of euros.
A sale of 10- and 30-year bonds by Spain and a general pickup in risk appetite were also credited with helping to lift the euro, strategists said, although uncertainty over the fate of an Irish aid package and ongoing concerns about debt problems elsewhere on the periphery of the euro zone may limit upside.
The euro (EURUSD 1.3649, +0.0124, +0.9168%) rose to $1.3647 from $1.3521 in late North American trading on Wednesday. See real-time currency quotes and tools.
Central Bank of Ireland Governor Patrick Honohan said Ireland is likely to end up receiving a loan as a result of talks between the government and officials from the European Commission, European Central Bank and the IMF, which were set to get under way Thursday. Read about Honohan's comments.
Hopes for a deal have allowed the euro to bounce back from lows below $1.35 seen earlier this week, with the European single currency also benefiting from a generally weaker dollar, said Kathleen Brooks, research director at Forex.com.
If no formal announcement on Ireland is seen before the weekend, however, “it would herald another week of uncertainty, which in our view, would act as a heavy weight around the market’s neck.”
The dollar index (DXY 78.50, -0.58, -0.74%) , which measures the greenback against a basket of six major currencies, slipped to 78.548 from 79.099 late Wednesday.
The British pound (GBPUSD 1.6012, +0.0109, +0.6854%) rose to $1.5996 from $1.5801 late Wednesday.
The Office for National Statistics said U.K. retail sales rose 0.5% in October, in line with market expectations.
The dollar was little changed versus the Japanese yen (USDYEN 83.3100, +0.1200, +0.1443%) , trading at ¥83.32.
The U.S. unit remained above yen levels at which market participants expected the Bank of Japan to intervene at the behest of the Ministry of Finance, to curb the yen’s appreciation. Such talk was rampant as the greenback teetered just about the ¥80 level in recent weeks.
“A large contingent of overseas speculators were keen to challenge the MOF’s resolve and test all-time lows in dollar-yen of ¥79.75,” said Bank of Tokyo-Mitsubishi UFJ strategist Naomi Fink.
“The problem, however, was that the anticipation of the Fed’s easing over-shot, exercising a much greater effect on the dollar than the announcement itself,” Fink said in emailed comments.
