Complete Property Market Updates of Singapore

April 26, 2008

US dollar rebounds despite weak data

Filed under: General — Propertymarketupdates @ 11:50 pm

The dollar rebounded in Asian trade yesterday as some traders looked beyond recent gloomy US data, betting on a recovery in the world’s largest economy later in the year, dealers said.

The dollar stood at 102.44 yen in Tokyo afternoon trade, up from 101.45 yen in New York on Friday. The euro slipped to US$1.5668 from US$1.5736 but rose slightly to 160.51 yen from 159.60.

The US currency clawed back after falling on Friday in response to news that the US economy lost 80,000 jobs last month, the biggest drop in five years. The decline was much worse than the 50,000 losses in non-farm payrolls that most economists had been anticipating.

‘But the market was already factoring in recession in the United States,’ said Shigeru Nakane, senior strategist at Resona Bank. ‘All in all, we are starting to see receding pessimism for the US economy. Things should not get much worse than they are now.’

‘We expect the housing market to remain weak, but people are starting to think that the overall US economy should not deteriorate much further,’ he said.

Wall Street managed to hold up relatively well in the face of the weak data, gaining support from hopes of further US interest rate cuts. Traders said the weak US jobs report raised the odds that the Federal Reserve would continue its rate-cutting campaign. ‘Traders responded by pricing more Fed easing which hurt the dollar,’ noted NAB Capital currency strategist John Kyriakopoulos. ‘Still, US stocks recovered from an initial post-payrolls decline to end flat on the day, so investor risk-appetite did not appear to suffer a large blow.’

Some economists said they expect the central bank to unleash fresh rate cuts later this month following the release of the March jobs report.

Against regional currencies, the US dollar slipped to S$1.3817 in late Asian trade from S$1.3844 on Friday, to NT$30.40 from NT$30.418, and to 9,220.00 Indonesian rupiah from 9,225.00. It also fell to 32.63 Thai baht from 31.65, and to 41.65 Philippine pesos from 41.72, but firmed to 974.00 South Korean won from 973.85. — AFP

Source : Business Times – 8 Apr 2008

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