Dollar under pressure in Asia after mixed data


TOKYO- The dollar came under pressure in Asia Monday following mixed US data and simmering geopolitical concerns, while the Indian rupee sat near one-year highs after the pro-business opposition won the country’s general election.

In midday Tokyo trading, the greenback fetched 101.55 yen, against 101.54 yen in New York Friday afternoon.

The euro rose to $1.3704 and 139.14 yen against $1.3695 and 139.08 yen.

The greenback was also sitting at 58.78 rupees — levels not seen since June — after falling more than one percent on Friday as Narendra Modi’s Bharatiya Janata Party (BJP) stormed to power at the end of a marathon election.

The prime minister-elect summoned senior figures from the Hindu nationalist party on Sunday for talks on forming a new government, which won a strong mandate on promises to introduce reforms to turn around the economy.

Investors were skittish over the simmering Ukraine crisis and growing anti-Chinese unrest in Vietnam, while data out of the United States gave a mixed picture on the world’s number one economy.

That boosted buying of the yen, seen as a safe haven during times of uncertainty or turmoil.

“The yen has been in demand, mainly due to unstable risk sentiment and falling expectations of the Bank of Japan considering a more aggressive monetary policy stance anytime soon,” Credit Agricole said.

On Friday, data showed US housing starts jumped a stronger-than-expected 13.2 percent in April, although the jump was driven by construction in the often-volatile multi-unit sector, while consumer confidence weakened.

Traders are now looking to Wednesday’s release of minutes from the Federal Reserve’s April 29-30 policy meeting, with Credit Agricole saying they “will be closely scrutinized for potential evolution of forward guidance as well as for clues on the monetary policy path going forward”.

Also Wednesday the Bank of Japan will complete its own two-day policy meeting, which will be watched for an idea of its plans for its own monetary policy.

SOURCE: AFP

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