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FOREX-Dollar rocky but off lows, eyes 14-yr low on yen

Published 11/25/2009, 08:56 PM
Updated 11/25/2009, 09:03 PM

* Dollar near key lows on yen, Swissie, euro

* Players brace for volatility with US on holiday

* Japan MOF Noda: not considering currency intervention now

By Shinichi Saoshiro

TOKYO, Nov 26 (Reuters) - The dollar was under pressure on all fronts on Thursday, after breaking down to 15-month lows the previous day, and looked in peril of marking a 14-year low against the yen as Japan signalled it was watching but unlikely to step in.

Dealers said short-term players continued to sell the dollar against the Japanese currency, after it fell to a 10-month low of 87.21 yen on Wednesday, although Japanese companies were buying dollars at the lower levels, helping keep it off the low.

The catalyst for Wednesday's breakdown, which took the greenback to a 15-month low against the euro and a basket of currencies, was an indication from the Federal Reserve that the dollar's fall has been orderly and interest rates will stay low for some time.

Market players said it was likely to remain under pressure in potentially volatile trading on Thursday, when U.S. markets are closed for Thanksgiving. But talk of an options barrier at 87.00 yen, as well as expected buy orders ahead of last January's 13-year low of 87.10 yen, could lend it some support.

"The dollar looks to decline further after slicing through key technical levels," said a dealer at a Japanese brokerage.

"The market is thinner than usual with United States on holiday, and speculators including various funds could take a shot at taking it to a 14-year low against the yen." It was steady from late U.S. levels at 87.43 yen after falling more than 1 percent and hitting 87.21 yen on trading platform EBS on Wednesday.

Japan's vice minister of finance, Yoshihiko Noda, said the country's government was paying attention to currency moves but not considering intervention now and that recent currency moves reflected dollar weakness.

The dollar index, which measures its performance against six currencies, nudged up 0.1 percent to 74.358 after dropping to a 15-month low of 74.227 the previous day.

The euro inched down 0.1 percent to $1.5114 after rising more than 1 percent on Wednesday and hitting a 15-month high of $1.5145 on EBS. (Additional reporting by Shinji Kitamura and Kaori Kaneko; Editing by Joseph Radford) ((shinichi.saoshiro@thomsonreuters.com; Reuters Messaging: shinichi.saoshiro.reuters.com@reuters.net; +81-3-6441-1774)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))

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