MW: Dollar flat, yen rebounds as risk appetite fades
By William L. Watts, MarketWatch
FRANKFURT (MarketWatch)—The U.S. dollar slipped versus most rivals but lost ground to the Japanese yen as overall risk appetite faded amid a lack of major economic data.
The ICE dollar index DXY +0.06% , which measures the U.S. unit against a basket of major rivals, changed hands at 79.747, little changed from 79.776 in North American trade late Friday.
The dollar USDJPY +0.08% bought 83.20 yen, down from ÂĄ83.36.
Against the yen, the euro EURJPY -0.02% fell 0.6% to ÂĄ109.37, after trading at its highest level in more than four months above ÂĄ110 earlier in the session.
The euro EURUSD +0.05% fetched $1.3164, down from $1.3174.
The dollar gave back some of its gains notched last week as Treasury yields came off their highs in recent sessions.
The dollar rallied last week as U.S. Treasury yields accelerated a move to the upside. Higher yields can boost a currency as global investors seek higher returns.
Yields, which move in the opposite direction of prices, accelerated a move to the upside last week after the statement following Tuesday’s Fed policy meeting was viewed as reflecting a more upbeat economic environment, lessening prospects for a third round of quantitative easing by the central bank.
“The lack of a press conference at the March Fed meeting may have allowed the market to get ahead of itself and the Fed may want to communicate more clearly that deviation from current targets are ill-advised,” said Geoffrey Yu, strategist at UBS.
The dollar rally last week did little to dent the euro, which held its ground above the $1.30 level as traders appeared to take a more upbeat view after Greece secured its second, international bailout.
An complicated auction process was under way Monday to settle claims under credit default swaps issued on Greek debt. The settlement was expected to proceed smoothly.
Jeremy Stretch, currency strategist at CIBC in London, said notions that Greece is secure or that the euro-zone debt crisis is contained may prove premature, but said the ability of the euro to hold above the $1.30 threshold versus the dollar means the currency could manage to grind higher in coming sessions ahead of Thursday’s closely-watched purchasing manager indexes for the euro zone.
The British pound GBPUSD +0.19% rose to $1.5887, from $1.5831.
British Chancellor of the Exchequer George Osborne will deliver the government’s latest budget plan on Wednesday.
