Dollar stays up in Asia

The dollar stayed firm against other major currencies on Thursday and could eke out more gains after a short-covering rally the day before, as investors fret that the Federal Reserve may fail to signal new stimulus for the economy this week.
Market players are worried that the US economy could slip into recession and are unconvinced that Fed Chairman Ben Bernanke is ready to signal another bond-buying programme when he speaks on Friday at a central bank conference in Jackson Hole, Wyoming.
US orders for durable goods surged in July, rising twice as much as economists had forecast, while the Congressional Budget Office said on Wednesday that the US budget deal and lower interest rates will slice projected budget deficits nearly in half over the next 10 years.
"Given political opposition and the risk of a loss of independence (by central banks) at a later stage, they both feel that they need to see evidence of further economic pain that would provide the political cover for action," said Ryan. A profit-taking slide in gold extended in Asian trade by more than 1 percent, sending it to $1,730 per ounce, and a rise in US Treasury yields also helped the dollar hold on to Wednesday's hefty gains, analysts said.
The dollar rose 0.1 percent versus a basket of major currencies , edging above the Tenkan line on its daily chart to 74.064, up from the previous day's trough of 73.666, while firming against the Australian dollar and the euro . "As Bernanke is unlikely to unveil another bond-buying programme, I expect the current short-covering in the dollar to continue after his speech," said Osamu Takashima, chief FX analyst at Citibank.
The greenback held steady against the yen at 76.96 yen, hovering above a record low of 75.941 yen marked on trading platform EBS last week. Tokyo traders said short-term players slightly lightened their dollar/yen positions, wary that exporters - still hoping to sell the dollar above 79 yen if Tokyo steps into the market - would be forced to offload it early next week in end-of-month transactions.
They echoed Takashima's view and said the dollar may strengthen further against the yen in the near term, given the potential for more position unwinding. "The dollar might rise a bit above 77.23 yen, its August 22 high, if market players try to trigger stop-loss buying," the trader said. Japan unveiled a $100 billion credit line on Wednesday for companies investing overseas and stepped up monitoring of currency positions of financial institutions in an attempt to curb the yen's strength. Market players see the credit line as intended to help offset the pain of yen strength for Japanese exporters rather than to curb the currency itself.
They cautioned against reading too much into the previous day's sell-off in gold and US bonds plus a rally in equities, saying the moves were likely rooted in position unwinding rather than any big shift in risk appetite or investors' views of economic fundamentals. The euro held steady against the dollar at $1.4400, down from this week's peak near $1.4500 and around the middle of the prevailing $1.4300-$1.4500 range, while the Australian dollar was 0.1 percent lower at $1.0449, having dipped 0.5 percent the previous day.