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FOREX-Dollar, yen hold strength, Aussie and kiwi fall

Published 11/19/2009, 07:44 PM
Updated 11/19/2009, 07:48 PM

* Higher-yielding Aussie, kiwi fall towards 2-wk lows

* Investors close their dollar shorts before year-end

* Nikkei tracks Wall St lower, capping risky appetite

By Satomi Noguchi

TOKYO, Nov 20 (Reuters) - The dollar and yen kept their broad strength on Friday as investors continued to sell higher-yielding currencies and took profits from gains made in the past few months in risky assets.

The Australian and New Zealand dollars fell and stayed vulnerable after having slid sharply the previous day to two-week lows as more investors cut long positions in those currencies.

The low-yielding dollar and yen, which have been used in risky carry trades, looked to hold their gains near-term as Asian stock markets were expected to track Wall Street lower and cap investors' risk appetite.

Tokyo's Nikkei share average fell 0.9 percent after U.S. stocks slid as another batch of economic data pointed to the fragility of the recovery.

"The biggest reason behind the dollar's gain looks to be simply seasonal factors," said Minoru Shioiri, a senior manager of FX trading at Mitsubishi UFJ Securities.

"The dollar is probably facing demand from overseas corporates ahead of the year-end in addition to investors closing their dollar shorts," Shioiri said.

The euro was down 0.1 percent from late New York trade at $1.4915

The dollar edged down to 88.95 yen, staying within a reach of a six-week low of 88.63 yen hit on trading platform EBS the previous day.

The Australian dollar fell 0.3 percent to $0.9187 after having dropped as much as 1.6 percent the previous day to a two-week low of $0.9132. It was down 0.2 percent against the yen at 81.71 yen.

The New Zealand dollar slid 0.5 percent to $0.7299 after having fallen more than 2 percent on Thursday to its lowest since Nov. 9. It fell 0.3 percent to 64.90 yen.

The Bank of Japan concludes its two-day policy meeting later in the day. But it is expected to have little impact on the market as the central bank is set to emphasise its intention to keep interest rates near zero for a long time.

BOJ Governor Masaaki Shirakawa is scheduled to speak at a news conference later, with an embargo on his remarks expected to be lifted around 4:15 p.m. (0715 GMT. (Reporting by Satomi Noguchi; Editing by Michael Watson)

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