US Dollar falls below ¥123 as euro jumps

Tokyo (Dec 4)  The dollar slipped below ¥123 in Tokyo trading on Friday due to selling triggered in part by its plunge against the euro after the European Central Bank’s latest monetary easing steps failed to meet high investor expectations.

The euro gained ground sharply against other major currencies on massive buybacks prompted by the ECB’s policy decision. Europe’s single currency briefly hit a one-month high against the dollar and a six-week high against the yen.

At 5 p.m., the dollar stood at ¥122.77-77, down from ¥123.37-38 at the same time Thursday. The euro was at $1.0872-0873, jumping from $1.0586-0586, and at ¥133.49-50, up sharply from ¥130.61-62.

In overseas trading overnight, the dollar briefly plunged below ¥122.30, with market sentiment dampened by a dive in U.S. stock prices after the ECB’s monetary stimulus decided at its policy-setting meeting on Thursday fell short of market expectations.

After moving around ¥122.70 in early Tokyo trading, the dollar dropped below ¥122.50 at one point as Tokyo stocks plummeted on selling by investors who were disappointed at the ECB’s decision not to increase the monthly pace of its asset purchases, contrary to expectations among some market players, market sources said.

Still, the dollar resisted falling further as market attention shifted to the release later on Friday of the closely watched U.S. jobs data for November.

“Unless the U.S. government jobs report shows sharp deterioration, the U.S. Federal Reserve is likely to carry out an interest rate increase this month,” an official at foreign exchange margin trading service firm said.

Source: JapanTimes