Dollar eases ahead of ECB meeting, US jobs data
The dollar was weaker in Asian trade on Wednesday as market players grew cautious ahead of the release of US job data and a European Central Bank (ECB) interest rate decision, dealers said.
By Agencies |
TOKYO: The dollar was weaker in Asian trade on Wednesday as market players grew cautious ahead of the release of US job data and a European Central Bank (ECB) interest rate decision, dealers said.
The dollar was changing hands at 105.95 yen in Tokyo morning trade, down from 106.10 in New York late Tuesday.
The euro firmed to 1.5810 dollars from 1.5796 and to 167.54 yen from 166.74.
Traders remained worried about the health of the US economy, despite a brighter than expected snapshot of US manufacturing activity published Tuesday.
The dollar received little support from news of an improvement in the Institute of Supply Management's manufacturing index in the United States to 50.2 in June from 49.6 in May, beating predictions of a drop to 48.5.
A figure above 50 indicates manufacturing is expanding. "The headline index was better than expected but new orders showed a drop," so the report failed to boost confidence in the US economy, said Satoru Ogasawara, foreign exchange strategist at Credit Suisse in Tokyo.
"The market is now waiting for the ECB meeting and the (US) jobs data," both due on Thursday, he said.
ECB monetary policy makers are widely tipped to raise eurozone interest rates by a quarter of a point to 4.25 percent, making the euro even more attractive to investors than the dollar.
The market will be watching remarks by ECB head Jean-Claude Trichet after the policymakers' meeting for clues on the outlook for rates beyond this week. Many analysts expect Thursday's expected rate hike to be a one-off for now.
Eurozone inflation hit a record 4.0 percent in June but economic growth is also showing signs of slowing sharply and higher borrowing costs could further put the brakes on economic activity, dealers said.
Thursday's monthly US labour market report will also be important for the future direction of the dollar amid concerns about rising layoffs in the manufacturing, banking and housing sectors, dealers said.
The dollar was changing hands at 105.95 yen in Tokyo morning trade, down from 106.10 in New York late Tuesday.
The euro firmed to 1.5810 dollars from 1.5796 and to 167.54 yen from 166.74.
Traders remained worried about the health of the US economy, despite a brighter than expected snapshot of US manufacturing activity published Tuesday.
The dollar received little support from news of an improvement in the Institute of Supply Management's manufacturing index in the United States to 50.2 in June from 49.6 in May, beating predictions of a drop to 48.5.
A figure above 50 indicates manufacturing is expanding. "The headline index was better than expected but new orders showed a drop," so the report failed to boost confidence in the US economy, said Satoru Ogasawara, foreign exchange strategist at Credit Suisse in Tokyo.
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"The market is now waiting for the ECB meeting and the (US) jobs data," both due on Thursday, he said.
ECB monetary policy makers are widely tipped to raise eurozone interest rates by a quarter of a point to 4.25 percent, making the euro even more attractive to investors than the dollar.
The market will be watching remarks by ECB head Jean-Claude Trichet after the policymakers' meeting for clues on the outlook for rates beyond this week. Many analysts expect Thursday's expected rate hike to be a one-off for now.
Eurozone inflation hit a record 4.0 percent in June but economic growth is also showing signs of slowing sharply and higher borrowing costs could further put the brakes on economic activity, dealers said.
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Thursday's monthly US labour market report will also be important for the future direction of the dollar amid concerns about rising layoffs in the manufacturing, banking and housing sectors, dealers said.
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