US Dollar lower against yen, euro but finds some support on Chinese trade data
Frankfurt (Jun 8) The dollar lost ground Wednesday as the U.S. interest-rate watch continues, but the greenback trimmed deeper losses after a relatively strong reading on Chinese imports.
The WSJ Dollar Index BUXX, -0.37% a measure of the dollar against a basket of major currencies, was down 0.2% at 85.82.
Against its Japanese counterpart, the dollar USDJPY, -0.37% was changing hands at ¥107.09, compared with ¥107.37 late Tuesday in New York, down 0.3%.
The dollar has come under downside pressure as dismal U.S. jobs data for May forced investors to adjust expectations about the timing of a rate increase. Federal Reserve Chairwoman Janet Yellen indicated this week that the central bank would hold off on raising rates until new uncertainties about the economic outlook are resolved.
The dollar traded as low as ¥106.72 before a rebound after the trade figures from China.
“We’ve seen a choppy trade today,” said Ayako Sera, head of research at Sumitomo Mitsui Trust Bank. “What we are seeing now is a response to China data.”
China’s imports declined 0.4% in May from a year earlier, compared with a 10.9% drop in April. This also beat analysts’ median forecast for a 6.6% decline. In May, China’s exports slid 4.1% from the previous year after declining 1.8% in April, indicating overseas shipments are continuing to drag on the country’s overall economic performance.
However, Sera said that given a lack of fresh trading cues, the dollar’s gains in Wednesday’s session might be short lived. The currency might come under further selling pressure on profit-taking if it fails to break above its upside resistance of ¥107.40, she said.
With investors largely sitting on the sidelines ahead of this month’s monetary policy meetings in the U.S. and Japan, the dollar will likely remain mostly directionless around ¥107, said Sera.
The euro EURUSD, +0.2201% was at $1.1371 from $1.1357, up 0.1% against its U.S. counterpart. The common currency EURJPY, -0.18% was at ¥121.74 from ¥121.93.
The British pound GBPUSD, +0.2819% , which has seen volatile trading in recent days due to polls on the U.K.’s referendum on its EU membership, traded moderately higher against the dollar, at $1.4560 versus $1.4546 late Tuesday.
Source: MarketWatch
