US dollar ticks up de­spite rate hike fears

The China Post - - MARKETS -

The U. S. dollar ticked higher Tues­day de­spite com­ments from a Fed­eral Re­serve of­fi­cial that cast doubt on a mid-year in­ter­est rate hike, while Greece’s bailout woes held back the euro.

In Tokyo, the green­back bought 119.44 yen, up from 119.22 yen in New York and sharply higher from 118.62 yen in Tokyo ear­lier Mon­day.

The euro was mixed, slip­ping to US$1.0734 from US$1.0741 while it strength­ened to 128.20 yen against 128.05 yen in U.S. trade.

The rise in the U.S. dollar came de­spite a key Fed­eral Re­serve of­fi­cial sug­gest­ing a U.S. rate hike could be pushed back be­yond mid-year.

New York Fed Pres­i­dent Wil­liam C. Dud­ley said re­cent in­fla­tion data was not strong enough to war­rant a near-term rise, even though eco­nomic growth was healthy.

“The Fed will likely start tight­en­ing later in the year, and there’s a strong ap­petite in Ja­pan for for­eign port­fo­lio and di­rect in­vest­ments,” said Taisuke Tanaka, Deutsche Bank’s chief cur­rency strate­gist in Tokyo.

“We con­tinue to rec­om­mend buy­ing the dollar-yen on dips.”

The euro re­mained un­der pres­sure af­ter fall­ing Mon­day on grow­ing wor­ries about Greece’s fu­ture in the eu­ro­zone, as Athens looks to se­cure bil­lions of eu­ros in bailout cash to pay its enor­mous debts.

With its cred­i­tors re­fus­ing to ex­tend a re­pay­ment dead­line while also hag­gling over its bailout re­forms, the Greek gov­ern­ment has or­dered all public agen­cies to hand over their fi­nan­cial re­serves.

“Mar­kets are recog­nis­ing Greece as a risk fac­tor as every­body knows the tight fi­nanc­ing sit­u­a­tion,” Keisuke Hino, a for­eign-ex­change trader at Mizuho Bank, told Bloomberg News.

“Mar­kets ex­pect a de­fault to be avoided but they have to keep the risk in mind.” The U.S. dollar strength­ened against other Asi­aPa­cific cur­ren­cies.

It rose to SG$ 1.3505 from SG$1.3447 on Mon­day, to 1,082.10 South Korean won from 1,081.95 won, and to 32.41 Thai baht from 32.37 baht.

The green­back also firmed to 44.28 Philip­pine pe­sos from 44.25 pe­sos, to 63.03 In­dian ru­pees from 62.54 ru­pees, and to 12,954.50 In­done­sian ru­piah from 12,879.00 ru­piah.

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