Dollar decreases in Asia on US concerns
AFPTOKYO--The U.S. dollar slipped in Asian trade on Wednesday owing to uncertainty caused by the U.S. government shutdown but losses were limited by hopes for a quick resolution to the crisis.
October 3, 2013, 12:11 am TWN
The greenback bought 97.74 in Tokyo, down from 97.94 yen late in New York and well off the 98.62 yen in Tokyo before the shutdown.
The euro fetched US$1.3521 compared with US$1.3527 while it slipped to 132.17 yen from 132.51 yen with the single currency hit by profit-taking after a recent rally and political uncertainty in Italy.
Hopes for a dollar rally will depend largely on how quickly Washington legislators resolve their budget dispute, with investors still betting a solution can be found soon, dealers said.
“If the shutdown continues beyond this weekend, further dollar weakening can be expected,” Junya Naruse, chief strategist at Daiwa Securities, told Dow Jones Newswires.
Analysts see the shutdown as bearish for the dollar because it could slow economic growth and also put off any Federal Reserve wind-down of its stimulus scheme.
“Market participants are taking the view that this partial shutdown won't be especially damaging for the economy but until the effects are known, the shutdown is a reason for the Fed not to reduce its US$85 billion bond-buying program,” National Australia Bank said.
The dollar was largely higher against other Asia-Pacific currencies.
It edged up to 62.46 Indian rupees from 62.35 rupees the previous day, to SG$1.2533 from SG$1.2531, to 31.31 Thai baht from 31.21 baht, to 43.41 Philippine pesos from 43.31 pesos, to 11,565 Indonesian rupiah from 11,239 rupiah, while holding steady at 1,074.30 South Korean won.
The Australian dollar slipped to 93.69 U.S. cents from 93.86 cents and the Chinese yuan edged down to 15.94 yen from 16.01 yen.