MW:Dollar falls against yen, euro in Asian trading
By Virginia Harrison, MarketWatch
SYDNEY (MarketWatch) — The dollar lost ground against the yen and euro in Asian trading hours Monday, as investors’ attention turned to global debt issues and reports that U.S. lawmakers would soon announce that attempts at a deficit-reduction package had failed.
The dollar index DXY +0.04% , which tracks the performance of the greenback against a basket of six other major currencies, fell to 77.994, down from 78.098 in North American trade late Friday.
“Fiscal policy challenges will remain center stage this week determining the mood of currency markets,” strategists at Credit Agricole said.
The U.S. congressional committee, assigned to draft a plan for cutting $1.2 trillion from the nation’s deficit over 10 years, is expected to announce Monday that it has failed, according to media reports. Read more on the U.S. supercommittee debt negotiations.
“Failure of the [deficit reduction] supercommittee to agree on a proposal, or Congress rejecting such a proposal, would be a blow for risky assets globally, especially given the backdrop of euro-area uncertainty and market stress,” Barclays Capital strategists said.
“Higher risk aversion would be a U.S. dollar negative against the Japanese yen, but positive versus risky currencies,” they said, adding that “any agreement this week should be received positively, lifting U.S. dollar.”
Against the Japanese yen USDJPY -0.09% , the greenback bought ÂĄ76.78, down from ÂĄ76.96 in North American trade late Friday.
The dollar was slightly weaker against the euro EURUSD +0.10% , with the European currency inching up to $1.3527, from $1.3510 in North American trading late Friday.
Spain’s Popular Party appeared close to taking a comfortable majority in parliament after general elections were held Sunday, media reports said, which could boost prospects of reform in one of the euro zone’s largest ailing economies. Read more on the Spanish elections.
Meanwhile, the British pound GBPUSD -0.28% was buying $1.5748, down from $1.5781 in North American trade late Friday.
Virginia Harrison is a MarketWatch reporter based in Sydney.
