TOKYO: The dollar rebounded in Asia on Tuesday after tumbling in New York on speculation that the US central bank will hold off winding down its stimulus programme for the time being.
The greenback fetched 98.40 yen in Tokyo afternoon trade, up from 97.89 yen in New York on Monday.
The euro bought $1.3255 compared with $1.3264, while the single currency edged up to 130.43 yen from 129.85 yen.
"The fact that the (dollar-yen) was supported in New York above yesterday's Tokyo low (of 97.63) encouraged some traders to test the upside," a forex manager at a Japanese bank told Dow Jones Newswires.
But the dollar's rally was likely to run out of steam before the Federal Reserve's two-day policy meeting starting Tuesday and a string of key US economic indicators this week, the manager added.
The Federal Open Market Committee is almost certain to leave its bond-buying scheme in place, analysts say, but the post-meeting statement will be scrutinised for signs of when, and how, it intends to reel it in.
A tapering of the programme would mean fewer dollars sloshing around in the financial system, which would boost demand for it.
Also in focus are policy meetings for the European Central Bank and Bank of England later in the week.
"Predictably, caution is the current watchword of markets globally ahead of the week's key event risks," National Australia Bank said.
The dollar was largely stronger against other Asia-Pacific currencies.
It firmed to Sg$1.2684 from Sg$1.2664 on Monday, to 43.41 Philippine pesos from 43.33 pesos and to 10,293 Indonesian rupiah from 10,290 rupiah.
It also edged up to Tw$29.95 from Tw$29.93, to 59.61 Indian rupees from 59.24 rupees and to 31.26 Thai baht from 31.19 baht while falling to 10,293.00 South Korean won from 1,109.35 won.
The Australian dollar slipped to 90.78 US cents from 92.60 cents while the Chinese yuan rose to 16.01 yen from 15.91 yen.
Comments
Comments are closed.