By Sarah Turner, MarketWatch
HONG KONG (MarketWatch) — The dollar moved lower in Asian trading hours Thursday, backing away from highs not seen for around two years, while the yen got a lift after the Bank of Japan stood pat on policy and the Korean won fell after a surprise rate cut.
The ICE dollar index DXY +0.11% , which measures the greenback against a basket of six currencies, reached 83.515, versus 83.542 in late North American trading Wednesday.
The dollar index climbed to its highest level in about two years Wednesday after the minutes from the Federal Reserve’s meeting last month showed that few officials thought more asset purchases would be necessary to boost the economy. Read more on dollar move.
The dollar USDJPY -0.57% bought 79.33 Japanese yen, down from 79.67 yen in late trading the previous day, after the Bank of Japan left ultralow interest rates unchanged at a policy meeting Thursday.
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The BOJ reaffirmed its commitment to steadily increasing the size of its asset-purchase program but didn’t announce any immediate increase in the overall size of the program. Read more about the Bank of Japan.
The Korean won turned lower in choppy trade, with the U.S. dollar buying 1,153.94 won, compared with the day’s low at 1,139.73 won.
The Bank of Korea lowered its base rate a quarter-point to 3%, marking its first policy easing in more in more than three years. Only three of the 26 economists polled in a Reuters survey had expected a reduction in rates, with the rest anticipating no change. Read more on the Bank of Korea rate cut.
“It’s exposed more than most to the ebb and flow of global growth and trade, which in part accounts for the [relative] volatility of the Korean won. The won move was the third biggest of the year, reflecting the fact that the decision was a surprise and sparking fears that the authorities were more concerned than was previously thought to be the case," said strategists at FXPro.
The euro EURUSD -0.15% traded at $1.2223, broadly flat from $1.2226 late the previous day, while the British pound GBPUSD -0.21% edged lower to $1.5471, from $1.5496.
Australia’s currency AUDUSD -1.01% declined to $1.0164, compared with its $1.0228 level in late North American trading Wednesday after the Australian Bureau of Statistics released jobs data for June that showed a tick up in the country’s unemployment rate to 5.2%.
Sarah Turner is MarketWatch's bureau chief in Sydney.
