By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) — The gained ground during East Asian trading hours Wednesday while the dollar headed lower, as somewhat strong business sentiment results from Japan contrasted with expectations that the Federal Reserve will further ease monetary policy.
The dollar rate against the Japanese currency (USDYEN 83.6000, -0.2300, -0.2743%) fell to 83.66 yen after having hit an intraday high of ¥84.07. The greenback closed at ¥83.92 on Tuesday in the U.S.
“Concerns remain about further easing by the Bank of Japan, but that is unlikely to happen before next week’s monthly meeting which leaves intervention as the only probable alternative between now and then,” said Michael Hewson, analyst at CMC Markets.
On Wednesday, the Bank of Japan’s quarterly survey of business sentiment showed a better-than-expected improvement in a key index, although it also offered a subdued outlook. Read more on Tankan survey.
Eight-month low
The dollar index (DXY 78.78, -0.24, -0.30%) , a measure of the currency against a basket of six major currencies, pushed as low as 78.828 early Wednesday, the lowest point since early February. It had closed at 78.956 on Tuesday.
“The U.S. dollar continues to lose ground on the foreign-exchange market as speculation of further quantitative easing causes investors to sell the greenback,” said strategists at Dankse Bank.
The euro (EURUSD 1.3605, +0.0024, +0.1768%) traded broadly flat against the dollar, at $1.3578, after ending Tuesday’s session at $1.3581
“Europe-wide protests against austerity are planned to take place today — most prominently in Spain, with demonstrations against public spending cuts and easier hire-and-fire laws,” the Danske Bank strategists said.
The British pound (GBPUSD 1.5822, +0.0022, +0.1393%) put in a slightly stronger performance against the U.S. dollar than the euro, trading at $1.5827, compared to $1.5789 on Tuesday.
