Dollar stays weak against euro

The dollar stayed weak against the euro in Asia on Monday on expectations of further credit easing in the United States while moving narrowly against the yen amid talk of intervention, analysts said.

The euro fetched 1.3461 dollars in Tokyo midday trading, marginally down from 1.3488 dollars in New York late Friday, while falling to 113.43 yen from 113.60.

The dollar rose slightly to 84.26 yen from 84.20 yen.

“The market trend hasn’t changed for a weak dollar, strong euro,” said Mizuho Corporate Bank market economist Daisuke Karakama.

“The euro isn’t firm because of a positive lead for the currency. It’s firm only because the dollar is weak” since the Federal Reserve said last week it might inject money into the economy, he said.

The euro may fall to 1.3400 against the dollar as investors take profits after it hit a five-month high of 1.3496 Friday, Kenichiro Ikezawa, senior dealer at Daiwa SB Investments, told Dow Jones Newswires.

The dollar was range-bound due to speculation that the Japanese monetary authorities may move for another yen-selling operation, Karakama said.

“It is stuck in a narrow range, with the possibility of Fed credit-easing blocking rises (of the dollar) and possible intervention on the downside,” he said.

Japanese authorities Friday declined to comment on speculation they had again intervened in currency markets to weaken the yen after the unit fell sharply against the dollar in volatile Tokyo trade.

Tokyo stepped into the currency markets on September 15 for the first time since 2004 in a bid to stem a strong yen after it hit a 15-year high of 82.86 against the dollar.