Dollar rises amid speculation about US economy


TOKYO: The dollar rose against the yen on Monday as trading remained cautious amid speculation about the timing of an end to the massive US stimulus programme.

The US decision to hold off from a military attack on Syria also helped risk appetite and led to selling of the safe-haven Japanese currency, traders said.

The dollar gained to 98.60 yen in afternoon Asian trade from 98.16 late Friday in New York.

The euro bought $1.3200, down from $1.3218, while the single currency was trading at 130.14 yen against 129.82 yen.

US President Barack Obama said over the weekend he would first seek authorisation from Congress before undertaking military action against Damascus. Congress is in recess this week and is not due to reconvene until September 9, making military action unlikely this week.

“With the Syrian risk put off for a week, there’s almost no need to worry about that for the time being,” Hiroshi Maeba, head of FX trading Japan for UBS in Tokyo, told Dow Jones Newswires.

Daisuke Karakama, market economist at Mizuho Bank’s forex division, said: “The market is paying more attention to US economic indicators than Syria.

“Especially, the market is focusing on US jobless figures to be released on Friday, ahead of the upcoming FOMC meeting.”

US consumer spending sputtered in July amid weak income growth, according to Commerce Department data released Friday.

The new data cast a cloud over speculation that the Federal Reserve will begin to reduce its $85 billion-a-month bond-buying programme this year.

Concerns about the strength of the major economic indicators in the third quarter could convince the Fed to delay the move, which could come as soon as its September 17-18 monetary policy meeting.

Currencies in emerging Asia, which had plunged recently on expectations of a taper of the US programme and risk aversion over possible military strike on Syria, were mostly higher.

The Indian rupee, which last week hit a new low in the 69 to the dollar range, was at 65.78 Monday afternoon, an improvement on 66.72 on Friday.

The Indonesian rupiah edged down to 10,943 to the greenback from 10,920, signalling investor confidence in the rupiah was still sorely lacking in spite of an economic policy package released by the government last week.

The dollar sagged to 1,101.15 South Korean won from 1,109.25 won, to Sg$1.2737 from Sg$1.2757 and to 44.19 Philippine peso from 44.63 peso, and to Tw$29.77 from Tw$29.92. The dollar held steady at 32.11 Thai baht.

The Australian dollar rose to 89.68 US cents from 89.38 and the Chinese yuan rose to 16.10 yen from 16.06 yen.

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