Wednesday September 9, 2009 - 10:20:41 GMT
Share This Story
Reuters - www.reuters.com
FOREX NEWS-Dollar edges lower, remains vulnerable
Wed Sep 9, 2009 6:00am EDT
* Euro edges up to $1.4500 EUR=, targets $1.4550, $1.46
* Dollar vulnerable on debasement fears
* Aussie, kiwi dollars off 1-year highs hit earlier
(Releads, updates prices)
By Tamawa Desai
LONDON, Sept 9 (Reuters) - The dollar edged lower on Wednesday after sharp selling the previous session, hovering near the year's lows against a basket of currencies.
Renewed questions over the dollar's long-term status as the world's reserve currency, investors moving out of dollars into other assets such as gold, and options-related euro buying had fuelled broad-based dollar selling on Tuesday.
Falling global shares and U.S. stock futures SPc1 tamed risk-seeking moves on Wednesday but market players said the dollar was within sight of some key support levels, including a July low of 91.73 yen, and $1.4550 and beyond against the euro.
"Risk-loving currencies continue to enjoy widespread support even as doubts linger over the health of the global economy," said Daragh Maher, deputy head of FX strategy at Calyon.
By 0921 GMT, the euro EUR= hovered near the key $1.4500 level, up 0.1 percent on the day. It rose to the year's high of $1.4535 on Tuesday.
For a chart on euro/dollar's technicals, click: r.reuters.com/qev55d
Options traders said options triggers were set at $1.4550 while chart targets were seen at $1.4620, a 61.8 percent Fibonacci retracement of its fall from above $1.60 in July 2008 to its October low near $1.2330.
UBS analysts cut forecasts for the dollar on "equity markets continuing to do well in the short term and U.S. investors still continuing to diversify portfolios into overseas markets."
They raised their 1-month euro/dollar forecast to $1.45 from $1.40 and 3-month forecast to $1.35 from $1.30, while expecting a $1.40-1.50 range for now, they said in a note.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was flat at 77.306, after hitting a one-year low of 77.047 on Tuesday .DXY.
For graphic of the dollar index's technical levels, click: r.reuters.com/caw55d
The dollar held against the yen, rising 0.1 percent at 92.44 yen JPY= after falling to 92.01 yen on Tuesday.
A launch expected on Wednesday of 12 mutual funds or "toushin" by Nomura Asset Management, which will invest in U.S. high-yield bonds, was expected to support currencies commonly traded against the yen.
The Australian dollar hit a one-year peak of $0.8662 AUD=D4 and touched its highest in almost a month at 80.00 yen AUDJPY=R, Reuters data showed.
But softer-than-expected retail sales took the wind out of its sails and it slipped 0.2 percent on the day to $0.8594.
The New Zealand dollar was last down 0.1 percent at $0.6943 NZD=D4 after hitting a one-year high of $0.6993.
Its peak comes ahead of a Reserve Bank of New Zealand meeting on Thursday, with expectations it will repeat that it wants to keep rates low well into 2010.
Sterling was flat, holding near two-week highs versus the dollar as markets awaited Thursday's outcome of the Bank of England's two-day policy meeting. The BoE is expected to keep rates unchanged and its asset-buying scheme untouched, although there is some speculation of further easing. [ID:nL7609671]
Due later on Wednesday is the Federal Reserve's Beige book, a summary of economic conditions in 12 Fed districts. Data on Tuesday showed U.S. consumer credit fell by a record $21.6 billion, raising concerns about the pace of recovery. (Additional reporting by Charlotte Cooper in Tokyo; Editing by Victoria Main/Ruth Pitchford)
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."