MW: Dollar slips against yen as risk appetite wanes after China data
The dollar fell against the yen on Tuesday, as slumping Asian stocks and weak China trade data prompted investors to buy the safety of the Japanese currency.
The greenback USDJPY, -0.40% was at ÂĄ119.78, compared with ÂĄ120.00 late Monday in New York. The U.S. currency was biased lower against the yen, as China trade data helped weaken the Australian dollar, considered a risk-sensitive currency, against the Japanese currency.
The ICE dollar index DXY, -0.08% was slightly lower around 94.835.
China’s imports and exports fell in September, in a sign of continued headwinds for the world’s second-largest economy.
With a steep 18% fall in China imports in yuan terms worsening appetite for risk, the Australian dollar AUDUSD, -0.8150% fell to 72.92 U.S. cents from 73.62 U.S. cents late Monday.
The Asian stock market’s weakness also helped bruise sentiment, fueling purchases of the yen, which is widely considered a safe haven in times of financial instability. The Nikkei Stock Average NIK, -1.11% closed 1.1% lower, while the Hang Seng Index HSI, -0.57% dropped 0.6%.
“The yen firmed as the Nikkei softened today, especially because the dollar remained top heavy around the lower half of ¥120 in recent trade,” said Yuzo Sakai, manager of FX business promotion at Tokyo Forex & Ueda Harlow.
“Until the release of the U.S. data such as retail sales and CPI (later this week), the dollar will likely remain directionless around where is hovering now,” said Sakai.
The dollar showed muted reaction to hawkish comments from Federal Reserve board members — a sign of lingering after effects of dollar selling following disappointing U.S. jobs data earlier this month, said Sakai.
Federal Reserve Bank of Atlanta leader Dennis Lockhart, a voting member of the interest-rate setting Federal Open Market Committee, on Monday reiterated that he expects the U.S. central bank to raise short-term interest rates this year.
But he also warned that incoming economic and financial news could affect officials’ decision.
Among other currencies, the pound GBPUSD, -0.8666% dropped to $1.5229, down from $1.5347 late Monday in New York, after data showed U.K. inflation turned negative in September.
The euro EURUSD, +0.3433% exchanged hands at $1.1381, up from $1.1360 on Monday.
