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12 April 2024

Dollar steady in Asia after Bernanke remarks

By Agencies


The dollar stayed stuck in Asian trade on Friday after an overnight fall as the market found no fresh incentives after downbeat remarks on the economy by the US Federal Reserve chief, dealers said.


The euro bought $1.4635 (Dh5.34) in Tokyo morning trade, little changed from $1.4637 in New York late on Thursday.


The dollar was modestly weaker at 107.85 yen after 107.94 while the euro edged down to 157.81 yen from 157.89.


Overnight in New York Thursday, the dollar fell against other major currencies after US Federal Reserve chairman Ben Bernanke highlighted economic risks, signaling further interest rate cuts to bolster growth.


Bernanke said there were significant risks the current US slowdown could deepen, although he also said that the central bank was prepared to act as needed to support growth.


"After the dollar bottomed out, there's no sense of direction for the dollar's trade now in Tokyo," said Masaki Fukui, senior market economist on foreign currency trade at Mizuho Corporate Bank.


On Thursday, Japan reported that its economy grew at a much faster than expected 3.7 per cent annualised pace in the fourth quarter of 2007, helped by solid exports and business investment.


But the effects of the strong data were limited as analysts widely expect the Bank of Japan to keep its super-low interest rates unchanged later Friday amid a global trend to slash borrowing costs.


Bank of Japan governor Toshihiko Fukui will give a news conference later Friday in which he could discuss the impact to Japan of the US downturn, which has been triggered by rising defaults on housing loans.


"Even though dealers will be observing what Governor Fukui will say this afternoon, they are predicting that the BoJ can't change its monetary policy very soon," said Masaki Fukui of Mizuho.


Despite the stronger-than-expected gross domestic product reported Thursday, "now is not the situation for either a rate-hike or a rate-cut," the Mizuho economist said. (AFP)