FOREX-Yen slips from peak as risk aversion eases slightly

Published 09/08/2010, 08:35 PM
Updated 09/08/2010, 08:36 PM

* Dollar/yen off 15-year low, but seen testing Y84

* Aussie near 1-month high ahead of jobs data at 0130 GMT

By Hideyuki Sano

TOKYO, Sept 9 (Reuters) - The yen fell from a 15-year high against the dollar while the euro regained ground after successful bond auctions in Portugal and Poland revived some appetite for risk.

But traders remain unconvinced that this positive mood on risk will last long enough to reduce expectations that the yen will continue to rally, testing the willingness of Japanese policy makers to intervene in forex markets.

"With dollar/yen, virtually all kinds of moving averages and trend lines are in a downtrend. So there are many hurdles to clear but the dollar needs to clear the five-day moving average of 84.00 at the least," said Teppei Ino, an analyst at Bank of Tokyo-Mitsubishi UFJ.

Dollar/yen held firm at 83.95 yen, up from Wednesday's 15-year low of 83.34 yen.

Ino said the greenback seems to have some support at the lower end of its Bollinger Band around 83.35, noting that the dollar rebounded at that level on Wednesday.

Dollar/yen needs to rise above its 21-day moving average, at 84.77 on Thursday, to reverse its downtrend that started in early May from around 95 yen, Ino added.

That is likely to be an uphill battle as Japanese exporters are thought to be eager to take advantage of a rise in dollar/yen to sell the dollar ahead of their half-year book-closing at the end of September.

The euro stood at $1.2730, after rising about 0.3 percent on Wednesday as Portugal raised 1.04 billion euros, helping soothe fears about government funding in Europe. Poland's sale of five-year bonds also saw solid demand.

The Australian dollar changed hands at $0.9175, holding near a one-month high of $0.9194 marked on Wednesday, with traders looking to Australian jobs data due at 0130 GMT.

The currency has met resistance at around $0.92 in recent sessions, though strong jobs numbers could help push the Aussie above that level and $0.9223, a three-month high struck in August.

The Canadian dollar kept Wednesday's hefty gains following a rate hike by the Canadian central bank. It stood at C$1.0370 per U.S. dollar.

Later on Thursday, the Bank of England will hold a monetary policy meeting, where it is expected to keep rates on hold at 0.5 percent and to refrain from increasing its asset purchase programme. The pound traded at $1.5460, off a 1 1/2-month low of $1.5296 hit on Tuesday. (Reporting by Hideyuki Sano; Editing by Joseph Radford)

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