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FOREX-Dollar lower after U.S. data helps risk appetite

Published 06/11/2009, 08:40 PM
Updated 06/11/2009, 08:48 PM
MFG
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* Higher oil prices support commodity-linked currencies

* Market seen range-bound ahead of weekend, G8

By Kaori Kaneko

TOKYO, June 12 (Reuters) - The dollar edged down against other major currencies on Friday after improved labour market and retail sales figures in the United States boosted optimism about the economy, eroding the dollar's allure as a safe haven.

A solid auction of U.S. 30-year Treasury bonds on Thursday eased supply concerns and pulled benchmark yields back from eight-month highs above 4 percent, which also lessened demand for the dollar, dealers said.

Commodity-linked currencies such as the Australian and the New Zealand dollars continued to benefit from higher oil prices, they said.

Investors will continue to check moves in Treasury yields and will also look to whether the Nikkei share average is able to keep its gains above the key 10,000 level. "Market moves in Asia will likely be rangebound led by short-term players," said Kazuyuki Kato, a treasury deparment manager at Mizuho Trust and Banking.

"But if the Nikkei stays above 10,000 the yen is seen weakening against commodity-linked currencies such as the Australian dollar," he said.

U.S. data on Thursday showed retail sales rose in May for the first time in three months and the number of workers filing new claims for jobless benefits last week was the lowest since January, fostering hopes the recession was abating.

The dollar index, a gauge of the greenback's performance against six other major currencies, fell 0.1 percent from late U.S. trade on Thursday to 79.450.

The euro rose 0.1 percent to $1.4425 after hitting a one-week high on Thursday of $1.4178 on electronic trading platform EBS. Against the yen, the euro was up 0.1 percent at 137.84 yen.

The dollar was steady at 97.61 yen.

Finance ministers from the Group of Eight (G8) industrial nations will meet in Italy on Friday and Saturday to assess efforts to combat the global economic crisis.

Dealers said the impact of the G8 meeting on the market is seen limited as the forex market is unlikely to be a major topic but G8 ministers are expected to discuss eventual exit strategies from crisis policies.

A G8 source said the International Monetary Fund has raised its global growth estimates for 2010 to 2.4 percent from 1.9 percent in April because of stimulus measures taken in recent months.

The Australian dollar climbed 0.1 percent to $0.8203, not far from an eight-month high of $0.8265 hit earlier this month.

The Aussie was up 0.1 percent at 80.02 yen after hitting an eight-month peak of 80.43 yen on Thursday.

The kiwi climbed 0.3 percent to $0.6450 and was up 0.2 percent at 62.90 yen after news that New Zealand retail sales rose in April. (Editing by Michael Watson)

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