MW: Dollar turns down as stock futures pare losses
By Deborah Levine and William L. Watts, MarketWatch
NEW YORK (MarketWatch) — The dollar turned down against the euro in early U.S. trading Friday as U.S. stock futures pared their losses, which currency traders took as an indication that investors may not be so risk-averse after the prior session’s dramatic moves.
After flitting near little changed through the European session, the dollar index DXY -0.58% , which measures the greenback against a basket of six currencies, fell to 73.908, from 74.216 in late North American trading Thursday.
The euro EURUSD +0.50% turned up to $1.4399, from lows under $1.43 and versus $1.4331 on Thursday.
Futures for the Standard & Poor’s 500 Index SP1U -1.47% traded at 1,127.90, up from the lows but still down 1.5% on the day.
Gold also came off a new all-time high, as safe-haven flows were credited with sending the yellow metal above $1,880 an ounce. See more on gold futures
The Japanese yen hovered near its all-time high versus the greenback as investors continued to shun risky assets, and analysts noted rumors of more intervention and action by central banks.
The dollar traded at 76.46 Japanese yen USDJPY -0.27% , down from ¥76.56 late Thursday. The dollar traded as low as ¥76.29 in Asian trading hours, within striking distance of its all-time low of ¥76.25.
The British pound GBPUSD +0.27% rose to $1.6569, up from $1.6508.
To some degree, the reversal in stock futures and currencies could be a bounce back after riskier assets took a pounding Thursday, when European bank shares dropped sharply, and after factory activity in the Philadelphia region fell in August to the lowest level for more than two years. Read about dollar rally after Philly Fed
A handful of currency analysts noted rumors about possible emergency Federal Reserve meeting as weighing on the dollar.
“There is a dearth of economic data today, but rumors are swirling around the market,” said Kathleen Brooks, research director at Forex.com. “There are rumors of traders being asked to stay late in Tokyo in case of [Bank of Japan] intervention to weaken the yen, the [Swiss National Bank] may be poised to act this weekend and the best of all is the rumor of an emergency Fed meeting — that is when we know things have become really bad.”
Swiss franc, intervention?
The Swiss franc remained in focus as the SNB earlier this week took additional steps in an effort to arrest the franc’s sharp rise on safe-haven flows. Japanese officials have also repeated threats to intervene to subdue a rising yen.
The euro EURCHF -0.57% pared earlier losses against the Swiss currency to buy 1.1340 francs, down slightly from CHF1.1360.
The U.S. dollar USDCHF -1.07% changed hands at 78.78 centimes, down from 79.30 centimes. One hundred centimes equal one Swiss franc.
Intervention threats and other concerns continue to present a conundrum for forex traders seeking safe-haven plays, said Kit Juckes, head of foreign exchange at Societe Generale in London.
“The yen and Swiss franc are going to be the obvious winners, [but] the reluctance of the authorities to see them appreciate ad infinitum is clear,“ he said. “The dollar can gain but that’s temporary. Gold comes out all shiny, yet again, as the ‘solution’ will be easier money.”
