Currencies

Thursday May 15, 06:04 AM
Forex - Dollar eases vs major currencies.after overnight gains

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TOKYO (Thomson Financial) - The U.S. dollar edged down against major currencies in afternoon trading in Asia on Thursday,

surrendering some overnight gains spurred by a growing view that efforts to stimulate the U.S. economy have worked.

The yen firmed as Japanese exporters unloaded some dollar holdings while the euro also

advanced.

There is increasing perception that U.S. interest rates may have bottomed for now following a series of data that suggested the world's biggest economy was slowing down but not as bad as many had feared earlier.

Data released on Wednesday showed tame U.S. consumer prices in April, providing more

reason for the Federal Reserve to sit on the sidelines for the time being.

At 1:15 p.m. (0415 GMT) the dollar was trading at 104.90 yen compared to 105.23 yen in early Sydney trade, while the euro was at $1.5477, up from $1.5461.

'The recent change in the market perception about U.S. monetary policy has sent the dollar

back above 105 yen. A growing number of investors are now even betting that the Fed may start raising interest rates before the end of this year,' Mitsubishi UFJ Securities forex manager Minoru Shioiri said.

'But unless we have hard evidence that the U.S. economy is picking up, it is not realistic to bet on a turnaround in the Fed's monetary policy and buy the dollar far above 105 yen,' Shioiri said.

John Noonan, a senior foreign exchange analyst at Thomson IFR Markets, said there is a

growing belief among investors that the worst is over for the U.S. economy and the Fed's job in providing stimulus is done.

'While this view holds and builds the dollar is likely to remain underpinned,' he said.

Tokyo 1:15 p.m. (0415 GMT) Sydney 10:10 a.m. (0010 GMT)

U.S. dollar

yen 104.90 down from 105.23

Swiss franc 1.0530 down from 1.0551

Euro

U.S. dollar 1.5477 up from 1.5461

yen 162.38 up from 162.660

Swiss franc 1.6302 down from 1.6313

pound 0.7950 up from 0.7945