Investors await tomorrow's US payrolls
The US dollar drifted slighly lower but remained rangebound against the major curencies on Thursday ahead of key US and Japanese data due out on Friday.
After hitting a five-month high of Y107.69 against the yen in the previous session, the dollar fell back in Asian trade as fiscal year-end dollar demand diminished after the Tokyo fixing. The dollar declined from Y107.35 to Y107.00 immediately after the fixing, but observers noted that the move was not as aggressive as in previous years and expected the new fiscal year in Japan to stimulate demand for dollars.
The beginning of the Japanese fiscal year in 2004 saw a marked increase in demand for foreign bonds by Japanese investors and suggests that any further dollar weakness in the very near-term should be utilised to establish long dollar/yen positions for a move toward the key Y110.00 level.
The market will focus especially on the non-farm payrolls data to look for any hint of inflationary pressure that could spark the Federal Reserve into tightening US monetary policy. The consensus forecast is for 220,000 more jobs to be added in the US in March, but analysts said that the figure is notoriously hard to predict.
Also released on Friday is the Japanese tankan report, which is expected to show business confidence has improved marginally. A strong showing could increase investor demand for Japanese stocks and support the yen.
By midday in London the dollar softened to Y106.90 against the yen, down from Wednesday’s New York close of 107.47.
The euro also made up some ground against the dollar, moving to $1.2960 by midday in London, up from Wednesday’s New York close of $1.2921.
However, the move had much more to do with dollar softening across the board than any interest in the single currency. Figures revealed that economic sentiment in the eurozone worsened, as inflation remained at 2.1 per cent for the second consecutive month, diminishing corporate and household spending . For the Euro area, the economic sentiment index for March declined to 97.4 from 98.8 in February.
Sterling was put under pressure as data from the Nationwide Building Society showed that in March UK house prices fell at their sharpest rate in nearly ten years. The pound moved £0.6893 against the euro, having closed in New York on Wednesday at £0.6875. Against the softer dollar however, the effect was marginal with sterling moving just 10 cents higher from Thursday’s close to $1.8800.
After hitting a five-month high of Y107.69 against the yen in the previous session, the dollar fell back in Asian trade as fiscal year-end dollar demand diminished after the Tokyo fixing. The dollar declined from Y107.35 to Y107.00 immediately after the fixing, but observers noted that the move was not as aggressive as in previous years and expected the new fiscal year in Japan to stimulate demand for dollars.
The beginning of the Japanese fiscal year in 2004 saw a marked increase in demand for foreign bonds by Japanese investors and suggests that any further dollar weakness in the very near-term should be utilised to establish long dollar/yen positions for a move toward the key Y110.00 level.
The market will focus especially on the non-farm payrolls data to look for any hint of inflationary pressure that could spark the Federal Reserve into tightening US monetary policy. The consensus forecast is for 220,000 more jobs to be added in the US in March, but analysts said that the figure is notoriously hard to predict.
Also released on Friday is the Japanese tankan report, which is expected to show business confidence has improved marginally. A strong showing could increase investor demand for Japanese stocks and support the yen.
By midday in London the dollar softened to Y106.90 against the yen, down from Wednesday’s New York close of 107.47.
The euro also made up some ground against the dollar, moving to $1.2960 by midday in London, up from Wednesday’s New York close of $1.2921.
However, the move had much more to do with dollar softening across the board than any interest in the single currency. Figures revealed that economic sentiment in the eurozone worsened, as inflation remained at 2.1 per cent for the second consecutive month, diminishing corporate and household spending . For the Euro area, the economic sentiment index for March declined to 97.4 from 98.8 in February.
Sterling was put under pressure as data from the Nationwide Building Society showed that in March UK house prices fell at their sharpest rate in nearly ten years. The pound moved £0.6893 against the euro, having closed in New York on Wednesday at £0.6875. Against the softer dollar however, the effect was marginal with sterling moving just 10 cents higher from Thursday’s close to $1.8800.
posted by Wise Money @ 1:11 PM
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