BS: Dollar Falls for Fifth Day as Fed Asset Purchase Crimp Demand
The dollar fell for a fifth straight day against the euro as the Federal Reserve’s asset- purchase plan to bolster sluggish economic growth damped demand for refuge.
The 17-member currency reached a fourth-month high versus the greenback as Prime Minister Mariano Rajoy considered whether to request economic assistance for the indebted nation after the European Central Bank said it would buy bonds to temper borrowing costs. The yen weakened against most of its major counterparts before the Bank of Japan (8301) meets Sept. 19. Taiwan’s dollar and South Korea’s won rallied as international investors increased holdings of Asian stocks.
“Spanish yields have moved higher, which is a reminder that the ECB action is positive, but won’t translate in to positive reduction in European risk unless Spanish sovereign risks are allayed,” said Aroop Chatterjee, a currency strategist at Barclays Plc in New York. “We prefer to sell the dollar versus riskier currencies rather than the euro.”
The dollar fell 0.2 percent to $1.3154 at 9:50 a.m. New York time, touching the lowest level since May 4. The shared currency added 0.6 percent to 103.57 yen. The dollar rose 0.5 percent to 78.76 yen.
To contact the reporters on this story: Allison Bennett in New York at abennett23@bloomberg.net;
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
