Wednesday April 2, 2014 - 00:22:20 GMT
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Reuters - www.reuters.com
FOREX NEWS -Yen still friendless, euro firms ahead of ECB
* Yen stuck in downtrend as risk appetite stays buoyant
* U.S. stocks post record-closing high
* Euro resilient as no easing expected from ECB on Thursday
By Ian Chua
SYDNEY, April 2 (Reuters) - The beleaguered yen found little
reprieve in Asia early on Wednesday, the only major currency showing a clear
trend as risk appetite stayed buoyant and investors continued to bet on more
stimulus from China and perhaps even Japan.
The dollar bought 103.66, having hit a 3-1/2 week peak of
103.71 as U.S. stocks rose to a record closing high. A break above the March 7
peak of 103.77 will take it back to highs not seen since late January.
The euro hovered near a three-week high of 143.07 , while
the Australian dollar was not far off a 10-month peak of 95.97 set on Tuesday.
The New Zealand dollar fetched 89.42 yen, having scaled a
6-1/2 year peak of 89.91.
"The combination of rising global equity markets with
rising U.S. Treasury yields is a catalyst for USD/JPY to move higher,"
said Kit Juckes, analyst at Societe Generale
Juckes added that this week's hike in Japan's sales tax to 8
percent from 5 percent also poses a big challenge to Prime Minister Shinzo
Abe's recipe of hyper-easy monetary policy, fiscal spending and promised
"As the prospect of further BoJ easing gets closer, now
is the time for USD/JPY to head towards and quite probably through 105 in the
coming weeks," he added.
Meanwhile, the euro drifted up to $1.3794, continuing to
recover from a one-month low of $1.3704 plumbed Friday. That saw the dollar
index dip slightly to 80.085, but still stuck in a slim 79.800-80.300 range
seen in the past week.
Euro bulls are betting the European Central Bank (ECB) will
stand pat on policy at its review on Thursday even as the threat of deflation
Data on Tuesday was encouraging with German unemployment
falling for a fourth month, while a business survey showed an across-the-board
rise in factory output that suggested a more entrenched recovery for the euro
In contrast, a recent string of disappointing Chinese data
has investors speculating on more action from Beijing. Just this week, two
surveys highlighted persistent weakness in China's manufacturing sector.
Such stimulus hopes have in part helped support demand for
commodity currencies. The Australian dollar hit a four-month high of $0.9310 on
Tuesday and last traded at $0.9241.
It's New Zealand counterpart reached a 2-1/2 year high of
$0.8702, before consolidating at $0.8617.
is no major economic data due out of Asia on Wednesday, leaving many investors
waiting for Friday's release of U.S. non-farm payrolls. (Editing by Shri Navaratnam)
© Thomson Reuters 2014. All rights reserved.
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