Dollar slips in Asia after US budget deal
December 12, 2013, 12:05 am TWN
TOKYO--The dollar slipped in Asian afternoon trading on Wednesday as investors locked in profits after a strong rally in the unit ahead of next week's Federal Reserve meeting.
The greenback weakened to 102.63 yen in Tokyo, from 102.81 yen in New York and above the 130-yen level in Asia Tuesday.
The euro also slipped to 141.26 yen from 141.48 yen, while it edged up to US$1.3762 from US$1.3760.
“After the greenback's rapid gains against the yen over the last month, it's natural that some position adjustments kick in,” said Kengo Suzuki, forex strategist at Mizuho Securities.
The unit won some support from a deal on U.S. spending that aims to avoid a repeat of a government shutdown.
Under an agreement reached in October that ended a crippling 16-day shutdown, federal spending authority expires on Jan. 15, when a new deal will need to be in force.
Investors are also keeping a close eye on U.S. November retail sales data Thursday as a gauge for timing the Fed tapering. The central bank has said it would start drawing down on the scheme once the world's biggest economy was on a firm footing.
Despite slipping Wednesday, the euro has been notching up gains after the European Central Bank last week held off any new interest rate cuts despite prolonged low inflation. That followed the ECB's surprise cut last month of its central refinancing rate by a quarter-point to counter the threat of deflation.
The dollar was mixed against other Asia-Pacific currencies.
It weakened to 32.02 Thai baht from 32.10 baht the previous day, to 11,985 Indonesian rupiah from 11,990 rupiah, and to 44.27 Philippines pesos from 44.29 pesos.
The greenback was flat at 1,052.60 South Korean won and SG$1.2494, while it strengthened to 61.36 Indian rupees from 61.22 rupees.
The Australian dollar firmed to 91.35 U.S. cents from 91.07 U.S. cents, while the Chinese yuan bought 16.92 yen against 17.01 yen.