Dollar and euro drift vs yen; eyes on stocks, CIT

TOKYO - The dollar and euro held broadly steady against the yen on Thursday, supported by this week’s rise in U.S. equities and some strong corporate earnings that boosted confidence about the outlook for the U.S. economy.

By (Reuters)

  • Follow us on
  • google-news
  • whatsapp
  • telegram

Published: Thu 16 Jul 2009, 10:19 AM

Last updated: Thu 2 Apr 2015, 8:30 AM

Investor confidence about the pace and strength of a recovery in the global economy had waned following weak U.S. jobs data released earlier in the month.

But that has been offset this week by better-than-expected results from bellwether Intel Corp and Goldman Sachs Group, which helped spark a rebound in U.S. shares. “Optimism is starting to appear again following U.S. corporate earnings including a strong result from Intel,” said a trader at a European bank.

“If the market gets past more U.S. earnings announcements that are on the way, and they are not too bad, yen crosses and equities could find solid footing,” the trader said.

The dollar rose 0.1 percent to 94.32 yen. The greenback has rebounded against the yen after hitting a five-month low of 91.73 yen on trading platform EBS earlier this week.

The euro dipped 0.1 percent to 132.76 yen.

Against the dollar, the euro fell 0.2 percent to $1.4077.

The trader at a European bank said the dollar and the euro could come under pressure against the yen during Tokyo trading if Japanese exporters decide to sell.

The yen seemed to take in stride a Beijing Times newspaper report saying China’s economy grew by 7.9 percent in the second quarter from a year earlier.

China is due to release second-quarter gross domestic product data at 0200 GMT, and the median market forecast is for 7.5 percent growth.

Market players said they were watching to see how financial markets would react to an announcement by CIT Group Inc, a major lender to small- and mid-sized U.S. businesses, that talks with the government to bail out the company had ended, a development that could ultimately drive the company to bankruptcy.

Some traders said the news provided an excuse to book some profits on yen crosses. The Australian dollar was down 0.3 percent at 75.50 yen and the New Zealand dollar dipped 0.2 percent to 61.02 yen.

“If share prices were to fall because of this, we could see moves that are opposite from what occurred yesterday and see some buying back of the yen,” said Tohru Sasaki, chief foreign exchange strategist at JPMorgan Chase Bank in Tokyo.

“It is possible that financial markets could move a bit towards avoiding risk-taking,” Sasaki said.

Although Japan’s Nikkei share average rose 2.1 percent, U.S. S&P 500 stock futures were lower on the day, dipping 0.4 percent.



More news from