MW: Dollar stuck as investors search for fresh clues to direction
The dollar was largely unchanged against the yen and the euro during quiet Asia trade Tuesday as many investors were reluctant to take strong positions amid a lack of fresh market-moving incentives.
The greenback USDJPY, +0.04% was at ÂĄ120.33, compared with ÂĄ120.36 in late Monday in New York.
The U.S. currency was flat against the euro EURUSD, +0.0365% which was at $1.0978 from $1.0973 late Monday. Against the yen EURJPY, +0.05% the bloc’s common currency was at ¥132.12 from ¥132.05.
The WSJ Dollar Index BUXX, +0.04% a measure of the dollar against a basket of major currencies, was down 0.07% at 89.74.
“Investors find it extremely difficult to make major moves as always in this season between the Christmas and the year-end holiday season,” Mizuho Securities chief foreign-exchange strategist wrote Kengo Suzuki in a morning note. The week is typically marked by thin trade as many market players are on vacation, although it is also when investors traditionally fine-tune their portfolios before year-end.
Recent oil price gyrations remained a source of concern. Light, sweet crude for February CLG6, +0.24% delivery lost $1.29, or 3.4%, to $36.81 a barrel on the New York Mercantile Exchange on Monday, snapping a four-session winning streak.
Oil prices weren’t staying high enough to increase risk appetite, said Kumiko Ishikawa, a senior foreign-exchange analyst at Gaitame.com Research Institute. This is despite a U.S. economy that is on an upswing after the Federal Reserve raised rates this month for the first time in several years, which typically would raise risk sentiment.
“I think investors don’t have to take an unnecessary positions at the end of the year,” barring any increase in risk appetite, she said.
“I was expecting some investors would take new positions in a positive manner after the Christmas holiday, in case of a turnaround into a risk-on mood. But the market is not in such a mood. That’s why we are seeing quiet trade today,” she said.
