Dollar under pressure in Asia

• tanvi_singh
• February 26, 2010

The dollar was under pressure against the euro and slightly rebounded against the yen in Asian trade on Friday after higher US jobless
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benefit claims clouded the outlook for the world’s largest economy.

The greenback traded slightly higher at 89.24 yen in Tokyo morning trade from 89.09 yen in New York late Thursday. The euro edged up to $1.3566 from $1.3546 and to 121.08 yen from 120.71 yen.

The dollar remained under pressure after the US Labor Department said new claims for jobless benefits had jumped to a three-month high, raising doubts about the strength of the economic recovery.

The seasonally adjusted initial claims in the week ending February 20 rose to 496,000, an increase of 22,000 from the previous week’s revised figure of 474,000, the department said.

Dealers also said remarks by Federal Reserve chairman Ben Bernanke are weighing on the dollar after he told a House committee that the US economy still needs low interest rate for some time, disappointing some who had expected a more hawkish stand.

“The market has kind of reverted to the more uncertain outlook it had last October-December on the US economy and the timing of the Fed’s exit strategy,” Yasuo Nakayama, manager at Shinkin Central Bank, told Dow Jones Newswires.

“After Bernanke’s comments this week that tightening is still distant, unless we get more positive data, the downward pressure on dollar-yen should remain dominant,” Nakayama added.

The single European currency firmed against major currencies, but dealers said it remained top heavy amid the debt and public deficit crisis afflicting Greece as well as other sovereign credit concerns in the bloc.
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• Last Modified: February 26, 2010
• Filed Under: Latest News, MARKETS, NATION, WORLD