TOKYO: The dollar and the euro stayed within a tight range Tuesday key meetings in Europe and Japan, while the Australian dollar slumped on a surprise rate cut.
The dollar stood at 78.09 yen Tuesday afternoon, nearly flat from 77.98 yen in New York Monday afternoon.
The euro was at $1.2892 and 100.70 yen, little changed from $1.2887 and 100.51 yen in New York.
The markets were waiting for headlines from Greece and Spain, as well as the results of a Moody's review that could see Spain downgraded to junk status, Kengo Suzuki, forex strategist at Mizuho Securities, told Dow Jones Newswires.
After Spain unveiled an austerity budget for 2013, some EU officials expressed their resolve to help the country if it seeks a bailout, as eurozone finance ministers gather for a meeting on October 8.
Rising hopes for a Spanish bailout are also expected to be discussed at a European Union summit on October 18-19.
The Australian dollar dropped to $1.0314 from $1.0342 after Australia's central bank on Tuesday cut interest rates by 25 basis points to 3.25 percent, ending a three-month pause.
"The outlook for growth in the world economy has softened over recent months, with estimates for global GDP being edged down, and risks to the outlook still seen to be on the downside," RBA Governor Glenn Stevens said in a statement.
"Growth in China has also slowed, and uncertainty about near-term prospects is greater than it was some months ago."
The Bank of Japan is due to hold its next meeting on Thursday and Friday, with dealers not expecting any fresh measures after last month extending its huge asset-buying scheme.
But the risk has increased for rhetorical interventions to tame the strong yen under the reshuffled government of Prime Minister Yoshihiko Noda that was launched Monday, Lawson said.
"The risks remain for more aggressive easing or direct forms of FX intervention."
New Finance Minister Koriki Jojima "appears less keen on direct foreign bond purchases than... new economy minister (Seiji) Maehara," she said, adding that the market needs more time to digest their policy inclinations.
"As such, the yen is likely to remain rangebound near term," she said.
The dollar lost ground against other Asia-Pacific currencies, falling to 52.46 Indian rupees from 52.90 rupees on Monday, to 1,112.68 South Korea won from 1,115.25 won and to 41.63 Philippine pesos from 41.83 pesos.
It also declined to Sg$1.2275 from Sg$1.2307, to 9,590 Indonesian rupiah from 9,593 rupiah and to 30.74 Thai baht from 30.84 baht, while China's yuan changed hands at 12.43 yen against 12.39 yen.
Comments
Comments are closed for this article.