Dollar Flat Against Yen, Euro Before Jobs Data; Aussie Jumps After Policy Meeting

 
    


By Hiroyuki Kachi 
 

        The dollar was almost flat against the yen and the euro in Asian trade Tuesday amid a continued lack of fresh trading cues that could push the greenback higher, while the Australian dollar jumped on The Reserve Bank of Australia's changing stance on the country's currency.
        Around 0455 GMT, the greenback was at Y123.99, compared with Y124.03 late Thursday in New York.
        The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was down 0.04% at 88.81.
        With a fewer number of market participants due to the summer holiday season, the currency market experienced thinner liquidity.
        In addition, after disappointing U.S. employment-cost data Friday cast doubts on a scenario for a September rate increase by the Federal Reserve, investors are sticking to their wait-and-see stance until the release of highly anticipated jobs data for July.
        "We expect U.S. jobs data later this week...and that's the key," said Akira Moroga, manager of forex products group at Aozora Bank. Solid U.S. employment is considered a factor that could allow the Fed to raise rates in September.
        The Australian dollar gained to $0.7343 and Y91.07 midday, respectively from, $0.7286 and Y90.36 in New York.
        As widely expected, the board of the Reserve Bank of Australia left the cash-rate target at a record-low 2.0%, where it has remained since May. But rather than saying the Aussie was likely to, and needed to, fall further, the bank made more benign remarks--saying the currency has been adjusting to lower commodity prices.
        The Aussie's momentum picked up in mid-morning Tokyo hours, with brighter-than-expected economic data also prompting buying of the resource-related currency which already has weakened on the falloff in commodity prices. Crude prices for Brent, the global benchmark, fell below $50 a barrel on Monday for the first time in six months.
        Australian retail sales rose by 0.7% in June from May, strong than a 0.5% rise economists had been forecasting. Meanwhile, the nation's trade deficit widened in June to a seasonally adjusted shortfall of A$2.93 billion, but lower than the A$3.1 billion deficit economists had been expecting.
        In other currency trade, the euro at $1.0941 midday, compared with $1.0950 overnight. The common currency was at Y135.65 from Y135.76.
        Investors shrugged off comments by Bank of Japan Deputy Gov. Kikuo Iwata who said Tuesday he didn't see a particular risk for the Japanese economy from a possible increase in U.S. interest rates, adding that such a move wouldn't necessarily lead to further gains in the dollar against the yen.
        Mr. Iwata said "a widening interest rate differential between the U.S. and Japan is normally considered a factor for weakening the yen." "But if the market has factored in the move, the yen won't fall," he added.
        Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com
        (END) Dow Jones Newswires
        August 04, 2015 01:42 ET (05:42 GMT)

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