Dollar sags to around ¥109.30 on lower Treasury yields

The dollar eased to levels around ¥109.30 in Tokyo trading on Wednesday, weighed down by lower U.S. Treasury yields, as traders remained on the sidelines ahead of key events in the United States and Europe.

At 5 p.m., the dollar stood at ¥109.29-30, down from ¥109.62-63 at the same time on Tuesday. The euro was at $1.1253-1254, slightly up from $1.1250-1250, and at ¥123.00-00, down from ¥123.32-39.

In overseas trading overnight, the dollar slipped as low as below ¥109.30 on the back of a fall in long-term Treasury yields following a media report that China is ready to increase its holdings of U.S. Treasuries.

In Tokyo, the greenback briefly rallied above ¥109.60 in the afternoon as the benchmark 225-issue Nikkei stock average retook the 20,000 mark at one point on the Tokyo Stock Exchange.

In late trading, the dollar lost steam and dropped below ¥109.30 again apparently due to selling by short-term European players, traders said.

The U.S. currency’s weakening came amid a growing wait-and-see mood before a general election in Britain and a U.S. Congressional hearing with former Federal Bureau of Investigation director James Comey, both on Thursday.

Traders are also focusing on a policy-setting meeting of the U.S. Federal Reserve next week.

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