Chronicle EditorTOKYO. — The dollar slipped from its 14-year-high against a basket of currencies yesterday as investors took profits ahead of holidays and a big batch of US economic data due later in the day.The dollar index, which measures the greenback against six major rivals, last stood at 103.02.
It has receded from the 103.65 marked on Tuesday, its highest since December 2002.
Still the dollar’s decline was limited as the Federal Reserve signalled more frequent rate hikes in 2017, partly on expectations for faster economic growth under the incoming Trump Administration.
While trade is expected to slow down ahead of Christmas, the market’s near-term focus is on a big batch of US economic data due yestersday, including revised GDP for July-September, durable goods orders for November, and weekly initial jobless claims.
“The market is relatively quiet on a holiday mood, but if the US economic data is worse than the market expects, the dollar is likely to be sold further,” said Kumiko Ishikawa, FX market analyst at Sony Financial Holdings.
The dollar index has gained more than five percent since the November 8 US election, as traders have bet that Trump will step up fiscal spending and stoke higher inflation.
The euro was up 0,1 percent at $1,0430, rebounding from $1,0352 on Tuesday, the lowest since January 2003.
The common currency could come under pressure as investors contemplate the future of the ailing Monte dei Paschi di Siena Italy’s third largest lender.
The world’s oldest bank has all but failed to pull off a last-ditch private sector rescue plan, making a state rescue for look inevitable, sources said on Wednesday.
Prime Minister Paolo Gentiloni’s new government is likely to meet this week to issue an emergency decree to inject capital into the bank, which the European Central Bank has judged the weakest of the euro zone’s major banks. — Reuters.
Peter Tanyanyiwa
Online Reporter