NEW YORK - The dollar held firm Friday as traders
consolidated positions and awaited next week's meeting of the US
Federal Reserve and Group of 20 summit.
The euro eased to 1.4706 dollars at 2100 GMT from 1.4740 dollars in
New York late Thursday, when the single currency hit its highest
level in almost a year.
The US unit edged up to 91.35 yen from 91.03 yen.
The dollar hit a seven-month low of 90.16 yen on Wednesday after
Japan's new finance minister suggested the authorities would not
intervene on the markets to weaken the rising yen.
Dealers said that with little new data, there was no fresh lead to
follow and so investors took some profits.
Analysts said that despite the latest move, the market was moving
away from the safe-haven dollar as the global economic recovery
gains momentum.
"The dollar experienced some much needed relief during overnight
trading as the recent selling frenzy halted in response to
substantial declines throughout global equity markets," said
Michael McGrath at PNC Bank.
"However, any gains in the greenback remain temporary as the
accelerating global recovery continues to bolster demand for higher
yielding assets."
Boris Schlossberg at Global Forex Trading said that "the dollar's
fate is now depended on the direction of US short term interest
rates" but that he expects the Fed to hold rates near zero next
week and for the near future.
"Despite some improvement in US economic data there is a myriad of
reasons for Fed remaining stationary for the next 12 months," he
said.
Neil Mellor at Bank of New York Mellon said the G20 summit was
keeping investors cautious. Although the summit was expected to
discuss the easing of some stimulus measures, the outcome was
unclear.
"With the G20 looming at the end of the week, investors should be
on their guard as the meeting's contingent air their views and
goals in the face of apparent discord on the proposed agenda,"
Mellor said.
"The coming G20 meeting in Pittsburgh could well prove to be a
decisive moment for the markets in 2009."
The British pound meanwhile fell sharply after news that the
country's public finances plunged further into the red in August,
striking a record deficit for the month under the weight of a deep
recession.
In late New York trade, the dollar stood at 1.0299 Swiss francs
from 1.0283 Thursday.
The pound was at 1.6228 dollars after 1.6445.
- AFP /ls