By: Barbara Zigah
The U.S. Dollar firmed against the majors in Asian trading today and traders expect that it could see some additional gains ahead of the Federal Reserve’s Jackson Hole symposium. The short covering rally which began yesterday was likely a result of investors worry that the symposium won’t yield any additional stimulus measures, and the growing possibility that the U.S. economy will fall into a recession. One forex strategist in Singapore said that he believes Ben Bernanke and the Federal Reserve may be waiting for clearer evidence that more stimulus is necessary before acting.
As reported at 12:30 p.m. (JST) in Tokyo, the U.S. Dollar steadied against the Japanese Yen, trading at 76.94 Yen and close to the 75.941 Japanese Yen record trough struck last week on the EBS trading platform. Some analysts believe that the greenback has more room to strengthen in the near term, as more traders unwind their positions. Yesterday, the Japanese government introduced a $100 billion credit line facility to help Japanese industry that is struggling with a too strong currency.
Yesterday, in the U.S., durable goods orders were reported higher in July, beating analysts’ forecast by as much as 100%. And the Congressional Budget office reported that an analysis of the recent budget deal shows that, with lowered interest rates, the budget deficits projected could be cut by nearly half over the next decade.