Greenback weakens in Asia while traders anticipate US Fed meeting
AFPTOKYO--The dollar weakened in Asia yesterday as attention turns to a U.S. Federal Reserve policy meeting while hopes grew among traders for a diplomatic solution to the Syrian crisis.
September 13, 2013, 12:06 am TWN
The greenback fetched 99.44 yen in Tokyo afternoon trade, down from 99.92 yen in New York and well off the levels around 100.50 yen seen on Wednesday in Asia.
The euro slipped to 132.36 yen from 133.03 yen while it bought US$1.3309 compared with US$1.3314.
With no fresh catalysts, eyes are now on next week's Fed meeting, where policymakers are expected to announce plans to start unwinding the bank's huge stimulus program.
A pull-back of the US$85 billion a month bond-buying scheme — which keeps U.S. interest rates subdued by keeping U.S. bond yields low— would mean fewer dollars in the financial system, which in turn would send the value of the currency up.
However, last week's worse-than-forecast August jobs report indicated the U.S. economy still needs some support, leading analysts to speculate that the Fed will not be aggressive in its taper.
Meanwhile, reports that Japanese Prime Minister Shinzo Abe is ready to go ahead with a sales tax increases aimed at bringing down the country's national debt have boosted the chance of more stimulus from that country's central bank, analysts said.
According to reports, Abe will launch a fresh economic package worth about five trillion yen (US$50 billion) to cushion the increase in taxes.
The dollar was lower against other Asia-Pacific currencies.
The U.S. unit sank to SG$1.2677 from SG$1.2699 the previous day, to 31.70 Thai baht from 32.14 baht.
The dollar also fell to 11,309 Indonesian rupiah from 11,412 rupiah, to 1,084 South Korean won from 1,087 won, to 63.50 Indian rupees from 63.87 rupees and to 43.77 Philippine pesos from 43.86 pesos.
The Australian dollar slipped to 92.51 U.S. cents from 92.87 U.S. cents. The Chinese yuan dropped to 16.22 yen from 16.41 yen.