US Dollar Flexes Muscle Against Yen, Loses Steam Against Euro

The US dollar continued its move up against the yen today. The dollar, however, remained weak against most other currencies after the Federal Reserve reported that there was a modest improvement in the regional economic conditions. Traders are now focusing on US reports of retail sales and weekly jobless claims for December, both of which are due later in the session.

While the US dollar rose against the yen by 0.5% to ¥91.86, the euro inched up 0.5% to ¥133.28. With traders adopting a cautious approach ahead of the European Central Bank policy meeting and a news conference by the bank's president, Jean-Claude Trichet, the euro held steady against the dollar at $1.4510.

Meanwhile, the Australian dollar jumped today by 0.6% from late US trade to $0.9294, after strong Australian employment data prompted investors to go for higher-yielding currencies. Following the release of the data, the Australian dollar rose 1.1% to ¥85.38, crossing the psychologically important ¥85 level.

At the same time, oil moved up towards $80 a barrel as traders tried to cover short positions. Gold prices eased marginally to trade at around $1136.95 an ounce.