MW: Dollar up vs. euro as Moody’s downgrades Ireland
By Lisa Twaronite, MarketWatch
TOKYO (MarketWatch) — The dollar extended its gains against the euro Friday, after Moody’s Investors Service cut Ireland’s debt rating by two notches.
Moody’s cut the country’s foreign- and local-currency government bond ratings to Baa3 from Baa1, with a negative outlook, citing “the expected decline in the Irish government’s financial strength combined with the country’s weaker economic growth prospects,” as well as “uncertainty created by the solvency test required by the European Stabilization Mechanism for the provision of future liquidity support.”
The euro (EURUSD 1.4455, -0.0034, -0.2347%) fell to $1.4455, down from $1.4493 in late North American trading on Thursday.
The dollar index (DXY 74.79, +0.11, +0.14%) rose to 74.791 from 74.683 late Thursday, when it dipped as low as 74.617, its lowest level since December 2009.
The British pound (GBPUSD 1.6352, +0.0004, +0.0245%) fell to $1.6328 from $1.6354 in late trading Thursday, while the Australian dollar (AUDUSD 1.0527, -0.0015, -0.1423%) was buying $1.0521, down from $1.0549.
But against the Japanese yen, the dollar (USDYEN 83.2700, -0.2500, -0.2994%) slipped to ¥83.17, from ¥83.41 late Thursday.
Japan’s finance minister Yoshihiko Noda, in Washington for meetings of finance ministers and central bankers from Group of Seven and Group of 20 industrial and developing nations, said he would turn to other G-7 countries for help in coordinating another currency intervention if the yen became “excessively volatile.” Read more on Group of Seven meeting.
Noda told The Wall Street Journal in an interview published Friday that he would take “decisive steps” to stabilize the yen if it becomes “excessively volatile,” even though the currency market had “calmed down” since last month’s concerted G-7 intervention.
A spate of Chinese economic data was the highlight of the Asian session, but had little impact on currencies as the figures were in line with those leaked in the previous session ahead of the release.
China’s consumer inflation accelerated in March to its fastest rate in almost three years, slightly ahead of expectations, suggesting China could further tighten policy. Read more on China data.
“Not surprisingly, there were no major moves in Asian forex markets on the back of official release; on the other hand, there was some buying after the bullish rumor numbers were circulated yesterday,” said Roland Randall, senior strategist for fixed income and foreign exchange at TD Securities.
