MDN: Dollar stuck in upper 76 yen level, euro supported by IMF hopes
TOKYO (Kyodo) -- The U.S. dollar was stuck in the upper 76 yen range in Tokyo on Thursday, while the euro was supported by hopes that the International Monetary Fund will beef up its resources to tackle the eurozone sovereign debt crisis.
At 5 p.m., the dollar traded at 76.75-76 yen against 76.78-88 yen in New York and 76.71-72 yen in Tokyo at 5 p.m. Wednesday. It moved between 76.72 yen and 76.85 yen, changing hands most frequently at 76.76 yen.
The euro fetched $1.2847-2849 and 98.60-64 yen compared with $1.2858-2868 and 98.78-88 yen in New York and $1.2795-2796 and 98.15-19 yen in Tokyo late Wednesday afternoon.
The dollar continued to move narrowly against the yen in Tokyo with the currency market remaining focused on Europe, dealers said.
The euro held its ground against the dollar and the yen after gaining in New York overnight on news that the IMF is seeking to boost its lending capacity to avoid further contagion from the eurozone debt crisis, they said.
"The dollar will likely stay in the current range for the near term, while it's possible the euro will see higher levels of around $1.3 and 100 yen" on short-covering, a senior dealer at a Japanese bank said.
Despite the euro's recent rally, many market analysts say the single European currency's rise may not continue in the longer term while the troubled situation in Europe remains the same.
"The market has reacted positively to the IMF announcement for now, but the point is who's willing to contribute (to the bailout loans.) We're still watching how it will turn out," the senior dealer said.
The euro may face selling if nothing concrete happens regarding expanding the Washington-based lender's resources at a meeting of the Group of 20 deputy finance ministers in Mexico on Thursday, he added.
Masafumi Yamamoto, chief foreign exchange strategist at Barclays Bank, also said in a note, "The United States and Britain are taking a negative attitude toward contributing (to the IMF)...the euro's further rise would be limited."
Bond auctions by Spain and France scheduled for later Thursday are expected to go smoothly and would not affect the currency market if the results come in as anticipated, dealers said.
