Dollar dips after Wall Street rally

TOKYO: The dollar edged back against the yen in Asian trade Thursday after surging to a near four-month high in US trade in response to forecast-beating US economic growth data.

In early trade in Tokyo the greenback bought 102.78 yen, compared with 102.81 yen late in New York but still well up from the 102.11 yen earlier in Japan. It had surged to 103.09 yen on Wall Street — its strongest since early April — after the Commerce Department said the US economy grew 4.0 percent in the second quarter, much more than the 3.0 percent predicted.

That was also a sharp rebound from the 2.1 percent contraction in the previous three months that was caused by a severe winter.

The euro bought $1.3396 in Tokyo midday trade, compared with $1.3395 in New York where it hit a new eight-month low of $1.3367.The single currency also fetched 137.68 yen on Thursday against 137.73 yen in US trade.

While the dollar was boosted by the growth data it retreated after the Federal Reserve said after its latest policy meeting that while the economy was strengthening, it was still concerned about the jobs market and would keep interest rates low for as long as needed.

The statement was “relatively dovish on the labour market, with the Fed keen to retain the message that rate hikes are some time away,” National Australia Bank said in a note.

Investors seemed little concerned after talks between Argentina and the US hedge funds it has branded “vultures” failed to reach agreement Wednesday on a debt repayment, effectively pushing the country into default.