05272016Fri
Last update: Fri, 27 May 2016 11am

Money and Banking: World

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The US dollar fell against the euro, yen, and franc on Thursday after US economic data showed weakness in business spending plans, denting expectations for a Federal Reserve interest rate increase in June or July. The Commerce Department said orders for long-lasting US manufactured goods surged 3.4 percent last month after increasing 1.9 percent in March. Economists polled by Reuters had forecast durable goods orders rising only 0.5 percent last month.
The US dollar fell from near a 10-week high against the euro and rose just slightly against the yen on Wednesday, as traders who are betting that the Federal Reserve will soon raise interest rates took some profits on the greenback's recent gains. The euro was last up 0.17 percent against the dollar at $1.1161. While modest, the euro's percentage gain was on track to mark the first such gain against the dollar in three sessions and marked a rebound from earlier in the day, when the euro sank to match Tuesday's roughly 10-week low of $1.1129.
The yen surged on Thursday, taking some of the wind out of the sails of the recently buoyant dollar and prompting investors to cover positions against a backdrop of potential event risks, including a speech by Federal Reserve chief Janet Yellen. The dollar earlier had stuck close to recent ranges, as investors looked for Yellen to provide clues on Friday as to whether a US rate increase is imminent, and awaited clarity from Japan on whether it would press ahead with planned sales tax hike next year.
The cost of hedging against swings in sterling rose to seven-year highs on Thursday while currency options indicated strong demand from investors betting on the pound's weakness less than a month before a British vote on EU membership. While betting markets suggest Britons will opt to remain in the European Union, most polls are neck to neck, though of late they show that those wanting to stay are edging ahead.
An early surge in the yen in Asia on Thursday put a dampener on any further progress for the dollar after a bullish two weeks and spurred speculation US investors are opposing any gains past 110.50 yen. In relatively illiquid conditions in the first minutes of trading in Tokyo, a large order drove the yen more than half a percent higher against the dollar, undoing the bulk of this week's gains for the US currency.
Interbank buy/sell rates for the taka against the dollar on Thursday. 78.40-78.40 (previous 78.40-78.40).
Most emerging Asian currencies rose on Thursday as the dollar broadly eased ahead of US Federal Reserve chief Janet Yellen's speech, causing investors to unwind some of their bearish bets on regional units against the greenback. The Malaysian ringgit led regional gains as higher crude prices eased concerns over the country's falling oil and gas revenues.