SINGAPORE: The US dollar advanced against the euro in Asian trade on Monday as markets reacted calmly to China's growth slowdown and took heart from the earnings prospects of US banks, analysts said.
The euro fetched $1.2239 in afternoon Asian trade compared to $1.2248 in late New York trade on Friday. The European currency also slipped against the yen, buying 96.82 yen from 97.08 yen.
The US dollar traded at 79.10 yen from 79.17 yen on Friday.
China's second-quarter gross domestic product figures, released Friday, largely met analyst forecasts, providing support to the greenback.
The United States is China's biggest trading partner.
"The Chinese GDP data... came better than expected," Justin Harper, market strategist for IG Markets Singapore, told AFP.
"It was coupled with the corporate earnings from JP Morgan which showed much firmer footing."
The US banking giant on Friday released an earnings report showing a $5 billion second-quarter profit, even after accounting for $4.4 billion in trading losses.
The profit was more than double previous estimates, sparking hopes of "a better than expected earnings season across the board for the big banks", Harper said.
Traders were also looking to US Congressional testimony from Federal Reserve chairman Ben Bernanke on Tuesday and Wednesday for any hint on a third round of quantitative easing, DBS Group Research said in a report.
"As far as the market is concerned, it is a question of 'not if, but when' the Fed will move towards a third round of quantitative easing measures or QE3," the report said.
But DBS Group Research said the odds for QE3 to happen in the second half of this year were dampened by minutes of a Fed report in June showing officials were more keen on a patient stance to boost the economy than pumping money in.
The greenback weakened against most Asian currencies, trading at Sg$1.2646 from Sg$1.2653 on Friday, 54.94 Indian rupees from 55.11 rupees and 41.97 Philippine pesos from 41.98 pesos.
The US dollar also fell to 1,146.48 South Korean won from 1,148.48 won, but was flat against the Indonesian rupiah at 9,444.99 and the Thai baht at 31.58, while ticking up against the Taiwanese dollar at Tw$29.99 from Tw$29.98.
The Australian dollar bought US$1.0230 from US$1.0212 on Friday while the Chinese yuan changed hands at 12.40 yen against 12.39 yen.
Comments
Comments are closed for this article.