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Forex - Dollar still up vs. rivals on Japan intervention

Published 10/31/2011, 11:52 AM
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Investing.com - The U.S. dollar remained broadly higher against its major counterparts on Monday, as Japan's move to weaken the persistently strong yen continued to boost demand for the greenback.

During U.S. morning trade, the greenback was sharply higher against the yen, trading close to two-month high with USD/JPY climbing 2.86% to hit 77.99.

Japanese officials launched an intervention to curb the appreciation of the yen after the dollar fell to a record low of JPY75.56 in early trade.

Japan’s Vice Finance Minister Fumihiko Igarashi said that the intervention was not targeting specific currency levels and added that it was too early to assess the impact of the action, which may not yet have ended.

The dollar was also sharply higher against the euro, with EUR/USD tumbling 1.38% to hit 1.3951.

The single currency came under pressure as investors feared that European policymakers' plans to bolster the region's banks could fail and that they would struggle to finance the enhancement of the euro zone's bailout fund.

Also Monday, official data showed that the annual rate of inflation in the euro zone was unchanged at its highest level in three years in October, while the number of people without jobs in the region hit a new record in September.

Elsewhere, the greenback was up against the pound and the Swiss franc, with GBP/USD dropping 0.16% to hit 1.6010 and USD/CHF rising 1.01% to hit 0.8721.

Earlier Monday, official data showed that U.K. bank lending rose slightly more-than-expected in September while mortgage approvals rose in line with expectations.

Meanwhile, the greenback was sharply higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD climbing 0.23% to hit 0.9941, AUD/USD tumbling 0.92% to hit 1.0601 and NZD/USD declining 1.12% to hit 0.8117.

In Canada, an official report showed that the country's gross domestic product rose more-than-expected in August, edging up 0.3% after a 0.4% increase the previous month.

Analysts had expected Canada's GDP to rise 0.2% in August.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 1.30% to hit 76.22.

Also Monday, data showed that manufacturing activity in the Chicago area fell more-than-expected in October. 

In a report, market research group Kingsbury International said its Chicago purchasing managers’ index fell to 58.4 in October from 60.4 in September. Analysts had expected the index to decline to 59.0 in October.

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