BLBG:Dollar Falls Versus Yen on Fed Speculation Before Growth
The dollar weakened for a third day against the euro before a U.S. report tomorrow forecast to show economic growth slowed last quarter.
The U.S. currency declined against all 16 of its major counterparts after Fed Chairman Ben S. Bernanke yesterday repeated a plan to keep borrowing costs low until at least late 2014. New Zealand’s dollar strengthened the most against the greenback of the most-active currencies as stock gains boosted demand for higher-yielding assets.
The dollar may be softer because of “some disappointment that the Fed did not offer any change in the expected interest- rate profile,” said Audrey Childe-Freeman, global head of currency strategy at JPMorgan Chase & Co.’s JPMorgan Private Bank in London. “Softer GDP data tomorrow would confirm that policy normalization remains a distant prospect. At the margin, this is dollar negative.”
The dollar declined 0.3 percent to $1.3253 at 9:07 a.m. in London after falling 0.5 percent over the previous two days. The greenback dropped 0.3 percent to 81.11 yen. The euro was little changed at 107.45 yen. New Zealand’s currency appreciated 0.5 percent to 81.73 U.S. cents.
To contact the reporter on this story: David Goodman in London at dgoodman28@bloomberg.net; Monami Yui in Tokyo at myui1@bloomberg.net;
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
