Dollar slips in Asia amid US financial worries
The dollar inched down against the yen and the euro in Asian trade Friday amid lingering market uncertainty over the health of corporate America and its financial institutions.
By Agencies |
TOKYO: The dollar inched down against the yen and the euro in Asian trade Friday amid lingering market uncertainty over the health of corporate America and its financial institutions, dealers said.
The dollar eased to 106.96 yen in Tokyo morning trade from 107.02 in New York late Thursday. The euro was at 1.5792 dollars after 1.5789 and at 169.00 yen compared with 168.97.
"Market sentiment towards the dollar is cloudy as uncertainty over the (US) financial sector remains strong," said Kenichi Yumoto, vice president of forex trading at Societe Generale.
"The economic fundamentals in the United States remain negative overall," he added, noting that the greenback was likely to drift lower due to concerns that US mortgage giants Fannie Mae and Freddie Mac are facing growing pressure.
The two firms, which have no explicit government backing despite their government charter, provide liquidity to the housing market by buying mortgages and repackaging them in securities sold to investors.
Concerns about their financial health mounted on reports that St Louis Federal Reserve chief William Poole on Thursday said that the two companies were "insolvent."
Traders were nervous ahead of major US banks' quarterly earnings reports amid fears of fresh credit-related losses, dealers said.
Players were also growing more risk averse due to financial market weakness, as Japan's benchmark Nikkei share index slipped below the key 13,000 points level briefly on Friday.
The yen tends to benefit from heightened market jitters as speculators cut back on riskier investments funded with cheap Japanese credit.
The euro continued to benefit from the higher level of interest rates in the eurozone compared with the United States although there were also worries about a slowdown in the German economy, dealers said.
Market players were also watching developments in the Middle East after Iran's missile tests, which sparked major concern in Western governments. They were also waiting for a survey of US consumer sentiment.
The dollar eased to 106.96 yen in Tokyo morning trade from 107.02 in New York late Thursday. The euro was at 1.5792 dollars after 1.5789 and at 169.00 yen compared with 168.97.
"Market sentiment towards the dollar is cloudy as uncertainty over the (US) financial sector remains strong," said Kenichi Yumoto, vice president of forex trading at Societe Generale.
"The economic fundamentals in the United States remain negative overall," he added, noting that the greenback was likely to drift lower due to concerns that US mortgage giants Fannie Mae and Freddie Mac are facing growing pressure.
The two firms, which have no explicit government backing despite their government charter, provide liquidity to the housing market by buying mortgages and repackaging them in securities sold to investors.
Concerns about their financial health mounted on reports that St Louis Federal Reserve chief William Poole on Thursday said that the two companies were "insolvent."
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Traders were nervous ahead of major US banks' quarterly earnings reports amid fears of fresh credit-related losses, dealers said.
Players were also growing more risk averse due to financial market weakness, as Japan's benchmark Nikkei share index slipped below the key 13,000 points level briefly on Friday.
The yen tends to benefit from heightened market jitters as speculators cut back on riskier investments funded with cheap Japanese credit.
The euro continued to benefit from the higher level of interest rates in the eurozone compared with the United States although there were also worries about a slowdown in the German economy, dealers said.
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Market players were also watching developments in the Middle East after Iran's missile tests, which sparked major concern in Western governments. They were also waiting for a survey of US consumer sentiment.
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