US dollar stronger against major currencies

| May 23, 2006 | 0 Comments

After Standard & Poor’s upgraded its outlook on Japan’s economy, citing an improved fiscal position and positive signs for private sector restructuring, the yen strengthened on Tuesday. Also helping the yen were remarks on interest rates from the governor of the Bank of Japan. It was said that these comments were likely meant to signal an end to the zero interest rate while assuring that no drastic changes in policy are planned for the moment.

The yen was 0.2 percent higher against the US dollar to ¥111.30 by midday in New York. The Japanese currency had added 0.5 percent each versus the euro and sterling, to ¥142.90 and ¥209.30 respectively.

The US dollar was also slightly stronger in the absence of any significant new economic data. Even so, a number of analysts are still saying that the greenback’s general trend is toward further weakness. Not all analysts agree with this scenario, however. The dollar added 0.3 percent to $1.2840 in relation to the euro. In addition, the US currency was up 0.3 percent versus sterling as well, to $1.8810, and it gained 0.5 percent on the Swiss france to SFr1.2095.

Some emerging market currencies, however, saw gains on the day against the greenback. The Turkish lira added 1.9 percent to TL1.4935 versus the dollar, while the Indonesian rupiah was up 1 percent to Rp9,250 and the South Korean won gained 0.9 percent to Won 943.50 to the dollar.

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