Business World

Wednesday 7 December 2016

Dollar drops to 15-year low against the yen

Published 26/10/2010 | 05:00

Down down: A man walks past a
board displaying the Japanese yen's
exchange rate against the US dollar
outside a brokerage in Tokyo
yesterday
Down down: A man walks past a board displaying the Japanese yen's exchange rate against the US dollar outside a brokerage in Tokyo yesterday

The dollar dropped to a 15-year low versus the yen after a Group-of-20 pledge to avoid "competitive devaluation" failed to dispel speculation the Federal Reserve will debase the greenback by announcing more bond purchases.

  • Go To

The US currency slid against all of its most-traded counterparts as investors added to bets that an increase in the Fed's quantitative easing will support higher returning assets. Australia's dollar was the biggest winner, advancing to within a cent of parity after a report showed producer prices rose in the third quarter faster than economists forecast.

"The market saw very little meaningful change over the weekend, and the path of least resistance is dollar weakness as QE still looms large in the market's eye," said Boris Schlossberg, director of research at the online currency trader GFT Forex in New York. "The dollar's weakness is most prominent against the yen, inching toward a critical level of 80."

The US currency dropped as much as 1.2pc to 80.41 yen, the weakest level since April 1995, before trading at 80.50 in New York, compared with 81.38 last Friday. The dollar slid 0.4pc to $1.4006 per euro, from $1.3954.

The dollar Index, a gauge of the greenback against six major currencies, has dropped 11pc since June 30 on rising speculation the Fed will add to asset purchases to boost the economy in a practice known as quantitative easing (QE). The depreciation prompted trading partners, including South Korea and Brazil, to temper currency gains.

The Fed may buy $2 trillion of assets to stimulate the US economy, starting with a programme of about $500bn of buying over six months that is likely to be announced at the November 2-3 meeting, Goldman Sachs wrote in a note to clients.

(Bloomberg)

Irish Independent

Read More

Promoted articles

Editors Choice

Also in Business