Dollar Falls To 4-week Low Against Yen

Add as your preferred news source on Google

Add Now

Extending Asian session's downtrend, the dollar declined to a 4-week low against the yen during early European deals on Monday as a fall in stock prices prompted investors to sell higher-yielding assets funded in Japan. But the dollar advanced to a new multi-year high against the British currency during this time. Meanwhile, the dollar eased from 6-day highs against the currencies of Europe and Switzerland.

The US markets will be closed today on account of the 'Labor Day' public holiday.

During early deals on Monday, the US dollar edged down against the Japanese yen. As of now, the dollar-yen pair is trading at a 4-week low of 107.64, compared to last week's close of 108.85. The next downside target level for the pair is seen around 105.00.

The average cash earnings for workers in Japan increased by 0.3 percent on year in July, the labor ministry said today in a preliminary report. That was slightly lower than the revised 0.4 percent annual increase in the previous month, and it was in line with analyst expectations.

The dollar advanced against the pound in early trading on Monday and hit a new multi-year high of 1.8007 at 4:40 am ET. This may be compared to Friday's closing value of 1.8219. If the dollar gains further, 1.78 is seen as the next target level.

The pound declined on disappointing economic reports released from UK today.

House prices in Great Britain fell for the 11th consecutive month in August, dropping 0.9 percent in August, according to the Hometrack housing valuation company. Hometrack reported that the decrease followed a 1.2 percent drop in July. For the full year to August, house prices were down 5.3 percent, the largest annualized fall since the Hometrack survey began in 2001.

The Bank of England said in a report that the number of loans approved for house purchases in the UK fell to 33,000 in July, the lowest since the series started in 1993. The bank had downwardly revised mortgage approvals for June to 35,000 from an initial estimate of 36,000. The report showed that total lending to individuals increased GBP4.3 billion or 0.3% in July from the prior month. On a yearly basis, total lending growth was 6.9%, slower than the 7.4% rise in June. The increase in net lending secured on dwellings was GBP3.2 billion in July or 0.3% from June. Meanwhile, annual growth slowed to 6.9% from 7.5%.

The dollar climbed to a 6-day high of 1.4618 versus the euro before losing ground at 9:25 pm ET Sunday. The pair moved to 1.4663 by about 4:10 am ET Monday compared to 1.4670 hit late New York Friday. The next upside and downside target levels for the euro-pound pair are seen around 1.481 and 1.457, respectively.

German retail sales dropped in July by a seasonally and calendar adjusted 1.5% in real terms, following June's 1.4% monthly decrease, a report released by the Federal Statistical Office showed today. Economists had expected just 0.3% monthly decline in retail turnover. Compared to previous year, turnover in retail trade was flat in July, while economists anticipated 2.3% fall. In June, retail turnover recorded an annual decrease of 3.9%.

The manufacturing PMI reports from Germany, France, Italy and the Euro-zone, which were also released today are likely to have influenced the euro-dollar pair.

Against the Swiss currency, the dollar weakened after hitting a 6-day high of 1.1050 by about 9:25 pm ET Sunday. The dollar-franc pair that closed Friday's deals at 1.1015 dipped to 1.0972 at 4:10 am Eastern Time. On the downside, the pair is likely to target the 1.093 level.

The Swiss SVME Purchasing Managers' Index dropped 1.6 points to 52.5 in August, a monthly survey conducted by SVME and Credit Suisse showed today. Economists were looking for a reading of 53.2. Although the index stood above the critical level of 50 in August, it remained below the long-term average of 54.4.

For comments and feedback contact: editorial@rttnews.com