U.S. Dollar Broadly Rebounds in Asian Trading

By: Barbara Zigah

As reported at 12:48 p.m. (JST) in Tokyo forex trading today, the U.S. Dollar broadly rebounded and recovered some of yesterday’s losses versus several high-yielding currencies. Investor covering of short U.S. Dollar positions helped push the greenback up .1% versus the common currency Euro, to trade at $1.3728; yesterday, it struck a 5-week low on the EBS forex trading platform when it fell to $1.3819.

Other high yielding currencies also fell versus the U.S. currency; the greenback edged up against the Canadian Dollar to C$1.0111, an increase of .1% and off of yesterday’s 20-month low of C$1.0071. Versus the Australian Dollar, the U.S. currency was trading at $0.9225, a .2% increase and off the 8-week low of $0.9253 struck yesterday. The U.S. Dollar Index, which gauges the greenback’s performance against a weighted basket of major currencies, rose to 79.764 .DXY, an increase of .1% and off of the 6-week trough established yesterday when it struck 79.764 .DXY.

Gains in the U.S. currency were limited, however, as investors continue to be cautious about increasing their dollar holdings given the U.S. Federal Reserve Bank’s continued position of suppressing interest rates to spur the American economy. Despite the official stance of the Fed, there is dissention among the ranks; Thomas Hoenig, President of the Kansas City branch of the Federal Reserve, opposes the “wording” or language of the press release as it relates to the definition of an “extended period.”