US Dollar Gets A Breather
After days of weakness, the US dollar inched up today following the prediction by an official from a Chinese sovereign wealth fund that the US currency may not head further south.
Peng Junming, an official at China International Corp, said that while the US dollar had hit its bottom and may not fall further, the yen might continue its downward trend. After rising sharply against the yen to 92.43 yen, the greenback fell back to around 91.70 yen on continued concerns over weak employment data that indicated continued weakness in the economy and lowered the probability of the Fed raising interest rates until later in the year.
Meanwhile, the yen gained broadly, pushing the euro down 0.5% to 133.03 yen. The fall in price was based on speculations that Japanese investors holding Eurozone bonds may dump the single currency when some of those bonds are redeemed later in the day. Although the euro slipped 0.1% to $1.4505, it remained close to the $1.4557 high it had achieved since mid-December.
