Thursday September 17, 2009 - 10:36:40 GMT
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Reuters - www.reuters.com
FOREX NEWS-Euro hits 1-yr high vs dollar; yen bounces
Thu Sep 17, 2009 6:13am EDT
* Euro hits 1-year peak; last up 0.2 pct at $1.4744 EUR=
* Gains in equities, commods boost sentiment, keeps dlr down
* Yen bounces after BOJ's Shirakawa comments
* Eyes on U.S. data; SNB policy decision due out at 1200 GMT
(Adds quotes, updates prices)
By Tamawa Desai
LONDON, Sept 17 (Reuters) - The dollar fell broadly on Thursday, hitting a one-year low against the euro, as equities and commodities advanced on expectations of economic recovery, putting pressure on the greenback.
European stocks tracked Asian equities and Wall Street higher after data on Wednesday showed U.S. industrial production rose more than expected in August [ID:nN16118540], boosting sentiment towards riskier assets and eroding the dollar's perceived safe-haven appeal.
Many expect the dollar's weakening trend to continue.
"With risk appetite so strong, the dollar remains under broad-based pressure and we cannot see anything on the horizon to alter that today," said Chris Turner, head of FX strategy at ING.
The euro rose as high as $1.4768 on trading platform EBS, its highest since mid-September last year. By 0954 GMT, it was up 0.2 percent at $1.4744 EUR=.
Some in the market say the recent euro rally could encounter profit-taking, with sell orders seen around $1.4770/80. Traders also cited options with a strike price around $1.4760 set to expire later in the day.
The falling dollar pushed gold prices higher, which rose to a new 18-month high and within a stone's throw of its record peak of $1,030.80 an ounce. That in turn helped boost non-dollar currencies, analysts said.
The yen got a boost after Bank of Japan Governor Masaaki Shirakawa said a stronger yen would push down prices in the near term but might support the economy in the longer run.
The central bank chief added he would carefully monitor the impact of currency moves on the economy and that rates should be formed in a stable manner in the market. [ID:nTKG006496]
"It's similar to what the MOF (Ministry of Finance) said the day before, but enough to knock 20-30 ticks from dollar/yen," said Geoffrey Kendrick, currency analyst at UBS.
The dollar was last at 90.63 yen JPY=, down 0.2 percent on the day, from around 91 yen earlier as attempts to break 90 yen ran out of steam.
It hit a seven-month low of 90.12 yen on EBS on Wednesday. Options with a strike price between 90.30 yen and 91.00 yen were seen expiring later in the day.
The yen had gained after Japan's new finance minister said currencies were not moving rapidly and that he opposed currency intervention as long as market moves were moderate.
Shirakawa was speaking after the BOJ kept interest rates on hold at 0.1 percent, as widely expected. Markets showed little reaction to the central bank upgrading its economic assessment.
The U.S. currency's weakness was reflected in the dollar index, last down 0.2 percent at 76.070 .DXY. It had struck a one-year low of 76.010 earlier.
The Australian dollar AUD=D4 rose to $0.8776, its highest since August last year. It was last up 0.1 percent at $0.8739.
The New Zealand dollar NZD=D4 also rose to a 13-month high of $0.7159. It was last flat on the day at $0.7127.
The Swiss franc CHF= hit a one-year high of 1.0281 to the dollar ahead of a scheduled Swiss National Bank policy meeting, with a decision due at 1200 GMT. The central bank will likely stick to its ultra-loose monetary policy even as it is set to raise its growth forecasts.
"Swiss franc bulls may be looking for some support from SNB 2009 growth forecasts, which should be revised higher," ING's Turner said. "Yet the SNB remains wary of Swiss franc strength, particularly its impact on exports and the capital goods sector." (Editing by Nigel Stephenson and Victoria Main)
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