Dollar edges up ahead of Obama speech

TOKYO: The dollar rose slightly in Asia on Thursday as traders waited for a speech by US president-elect Barack Obama on his plans to rescue the troubled US economy, dealers said.

They said the market was also bracing for an expected interest rate cut by the Bank of England (BoE) later in the day.
The dollar gained to 92.83 yen in Tokyo morning trade, up from 92.65 late on Wednesday in New York. The euro fell to 1.3581 dollars from 1.3644 and to 126.07 yen against 126.42.

"It is difficult to make moves before Mr. Obama's speech and the possible rate cut by the BoE," said Masato Ohtsubo, a dealer at Resona Bank.

Obama was due to deliver a policy speech in which he would argue the need for urgent action to revive the US economy and save or create over three million jobs, according to his transition team.

Analysts were generally forecasting the BoE would reduce its key lending rate for a third month running from the current level of 2.0 per cent.

The euro gave back most of its gains against the dollar seen on Wednesday, when the greenback had been hit by weak economic and corporate news.

A survey showed that the US economy shed 693,000 private non-farm jobs in December���much more than expected���stoking fears that an official snapshot of the labour market due on Friday will be particularly grim.

NAB Capital analyst John Kyriakopoulos described the ADP survey results as "truly shocking."

"Currency investors are now focusing much more on relative economic growth. In this regard, the employment news out of the US confirmed that its economy remains in the worst shape," he said.

Japanese Prime Minister Taro Aso said a sharp drop in the dollar would be "a very big negative factor" for Asia's biggest economy, whose exporters have been hurt by a stronger yen and which has large reserves of the US currency.