Dollar gets some support from Greenspan
March 3, 2005
Tokyo - The dollar was slightly firmer in cautious Asian trade on Thursday ahead of US jobs data and after congressional testimony by US Federal Reserve chairman Alan Greenspan offered no fresh leads on the outlook for interest rates, dealers said.
The dollar firmed to ¥104.89 in Tokyo afternoon trade from ¥104.73 in New York late Tuesday.
The euro eased to $1.3132 from $1.3136 while rising to ¥137.77 from ¥137.62.
Greenspan said Wednesday that the US budget deficit was unlikely to improve in the coming years "unless major deficit-reducing actions are taken" and urged Congress to act decisively to rein in government spending.
While the central bank chief did not discuss interest rates, his comment that the US economy was growing at a reasonably good pace supported the dollar to a degree since it suggested the Fed will continue with its measured pace of monetary tightening.
"Greenspan's testimony did not give a fresh incentive to the market but his comment on the US economy prevented the dollar from falling," said Hideyuki Tsukamoto, foreign exchange manager at Mizuho Bank.
Now the market is waiting for the US employment report for February due out Friday.
"If the non-farm payroll data shows a job increase of around the 200 000 mark, the dollar will probably continue its modest gains but if the figure tops the 250 000 level the rally could really see strong momentum," said Nobuaki Kubo, a Resona Bank foreign exchange dealer.
"However, if the data shows job creation levels of only 130 000-150 000, appetite for the dollar will decline notably," Kubo said.
The dollar's upside, however, was capped by further capital repatriation by Japanese firms ahead of the end of the fiscal year at the end of March, dealers said.
In Singapore trading, the dollar rose to 38.46 Thai baht from 38.34 on Wednesday, to 1 006.2 South Korean won from 1 006.1, 9 285 Indonesian rupiah from 9 283, 54.835 Philippine pesos from 54.755 and to 1.6278 Singapore dollars from 1.6240.
It fell to 30.853 Taiwan dollars from 30.886. - AFP
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