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Dollar lower vs. yen, steady vs. euro, German ZEW in focus

Published 02/19/2013, 04:43 AM
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Investing.com - The dollar was lower against the broadly stronger yen on Tuesday following remarks by Japan’s Finance Minister Taro Aso, while the euro was little changed close to three-week lows.

During European morning trade, the dollar was down against the yen, with USD/JPY falling 0.45% to 93.53.

The yen strengthened broadly on Tuesday after Japan’s finance minister said the government is not considering buying foreign bonds through a fund with the Bank of Japan, one day after Japanese Prime Minister Shinzo Abe said the idea was one option for monetary easing.

The dollar was little changed close to three-week highs against the euro, with EUR/USD inching up 0.02% to 1.3352.

The single currency remained under pressure after European Central Bank President Mario Draghi reiterated Monday that the euro’s exchange rate could affect the bank’s inflation outlook.

Investors also remained wary ahead of the upcoming Italian general elections next week, amid concerns that a hung parliament could hamper ongoing efforts at economic reforms.

The greenback was trading close to seven-month highs against the pound, with GBP/USD easing up 0.16% to 1.5490, as recent weak economic data added to fears over a triple-dip recession and the risk of the U.K. losing its triple-A sovereign rating.

Elsewhere, the greenback was steady against the Swiss franc, with USD/CHF inching up 0.02% to 0.9235.

The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD rising 0.15% to 1.0122, AUD/USD up 0.33% to 1.0339 and NZD/USD dipping 0.01% to 0.8452.

The Australian dollar was higher after the minutes of the Reserve Bank of Australia’s February 5 meeting indicated that the bank would wait to assess the impact of recent rate cuts before deciding to cut rates again.

The RBA said that while the inflation outlook left scope to ease policy further, it would need to see clear indications of a slowdown in the economy.

Meanwhile, the New Zealand dollar rebounded from session lows after dropping earlier following reports that China’s quarantine administration had destroyed milk powder imports from New Zealand.

Fonterra Group, the Auckland based dairy product exporter, said none of its products were destroyed by the Chinese authorities.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, dipped 0.07% to 80.67.

Investors were awaiting the ZEW index of German economic sentiment later in the day.



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