Profit Taking Sends U.S. Dollar Lower

By: Barbara Zigah

The U.S. Dollar slipped finally as profit taking slowed the recent rally, however analysts concur that the uptrend remains intact as the latest positive economic data more than supports the outlook. As reported at 1:00 p.m. (JST) in Tokyo,, the U.S. Dollar was trading lower against the Japanese Yen, at 83.37 Yen coming off the 11-month high of 84.19 Japanese Yen. On the week, the USD/JPY pair gained some 1.2% and neared last year’s high of 85.53 Yen though analysts expect that the pair is likely to move above 86 Yen. The recent improvement in data points from the U.S. has led the Federal Reserve to revise upward its growth estimates as well as inflation targets and employment outlook. The consideration of any additional quantitative easing is being withdrawn as a result.

The U.S. Dollar also was trading lower against the Euro, bouncing off a 1-month through at $1.3002 to recover to $1.3090. Other commodity linked currencies also traded higher against the greenback, including the Australian Dollar which rose from a 1-month low touched don yesterday to $1.0545 earlier. Support is likely at $1.0404, the 200-day moving average; the recently struck high of $1.0550 will likely cap any further rise, according to analysts.