Dollar recovers to lower 118 yen but gains capped ahead of FOMC
Tokyo-Japan (Jan 28) The U.S. dollar traded in the lower 118 yen zone in Tokyo on Wednesday morning, pinned in a narrow range amid a wait-and-see mood ahead of the U.S. Federal Reserve's policy meeting after losing and then gaining ground on mixed U.S. economic indicators.
At noon, the dollar fetched 118.11-13 yen compared with 117.81-91 yen in New York and 118.03-05 yen in Tokyo at 5 p.m. Tuesday .
The euro was quoted at $1.1335-1336 and 133.88-89 yen against $1.1375-1385 and 134.15-25 yen in New York and $1.1249-1251 and 132.78-82 in Tokyo late Tuesday afternoon.
The dollar recovered from the upper 117 yen range earlier in the morning as traders absorbed the Conference Board's January index of U.S. consumer confidence, which came in at its highest reading since August 2007 and included increased expectations of wage growth, said Shinichiro Kadota , foreign exchange strategist at Barclays Bank .
The strong data balanced out the earlier release of U.S. durable goods orders, which shrank 3.4 percent in December, confounding market expectations and seeing the dollar fall to the lower 117 yen zone in New York .
The dollar's recovery would likely be capped in the lower 118 yen zone in Tokyo trading time, however, with the outcome of the Federal Open Market Committee meeting looming as a risk event later in the day, Kadota said.
Fed policymakers "are expected to stick to their previous statements about the timing of an interest rate hike, but there is an element of concern in the market that they could alter their wording slightly about U.S. economic recovery," Kadota said.
The euro moved little against the dollar in Tokyo , maintaining most of its overnight gains from a combination of the U.S. currency's broad depreciation and selling of the Swiss franc following comments by Swiss National Bank deputy vice chairman Jean-Pierre Danthine , Kadota said.
"The euro strengthened across the board as it was bought against the Swiss franc after Danthine said the Swiss central bank is prepared to intervene in exchange markets," he said.
Source: JapanEconomicNews
