Reuters: US Dollar Report: FOREX-Dollar steadies vs rivals in Asia after volatile moves

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FOREX-Dollar steadies vs rivals in Asia after volatile moves Aug 16th 2013, 03:55 Thu Aug 15, 2013 11:55pm EDT * Mixed U.S. data sends unclear signals on Fed policy outlook * TIC data raises concerns about long-term pressure on dollar By Lisa Twaronite TOKYO, Aug 16 (Reuters) - The dollar firmed in Asia trade on Friday after uncertainty about the U.S. Federal Reserve's stimulus withdrawal knocked it off a one-and-a-half-week peak against the yen in a choppy session the previous day. The greenback initially rallied early on Thursday when upbeat U.S. jobless claims data suggested an early end to the Fed's asset purchases and lifted yields on U.S. Treasuries. But disappointing data on industrial output and manufacturing set the stage for the dollar's reversal. Concerns about a recent outflow from U.S. debt added to pressure on the dollar. The latest Treasury International Capital (TIC) data showed foreign investors sold long-term U.S. securities for a fifth straight month in June, undermined by U.S. Treasury outflows that were the largest on record. "Since we know that USD saw a temporary swoon in June but ultimately ended roughly unchanged on a trade-weighted basis, it is clear that the TIC data is not telling the full story for FX," said Citigroup strategist Todd Elmer in a note to clients. "We remain USD bulls for the time being, but the TIC raises further questions about the sustainability of the uptrend in the medium- to long-term," Elmer said. The yield on the benchmark 10-year Treasury note edged up to 2.79 percent in Asia on Friday from its U.S. close of 2.76 percent on Thursday, when it hit a two-year high of 2.823 percent. The dollar rose 0.2 percent to 97.56 yen, moving back toward Thursday's high of 98.64 yen, which was its highest since Aug. 5. Support lies just above 97.00 yen, helping the U.S. unit stay above its seven-week low of 95.810 hit last week. The dollar index was slightly higher at 81.206, after Thursday's volatile trade pushed it from a high of 81.943, its highest since Aug. 6, to a low of 81.098. The euro edged down slightly to $1.33344. The single currency also saw volatile trade on Thursday, falling to a two-week low of $1.3205 before rising as high as $1.3363. "There was no rhyme or reason to the (dollar's) move," said one trader at an Australian bank in Sydney. "It looks like gold went first, and then the dollar cratered. Whether that was linked is hard to say." The trading range was so wide that stop-loss orders were filled on both the upper and lower ends of the day's range, he added. Gold slipped slightly on Friday after first touching a fresh two-month high, and was last at $1,365.26 after surging more than two percent in the previous session. The break of major resistance at $1,350 on Thursday may have triggered selling in the dollar, the dealer said. New Zealand's dollar fell around a third of U.S. cent after a strong earthquake struck near the country's capital of Wellington, though there were no immediate reports of damage. The currency dropped to $0.8067 NZD=D4, from $0.8098, after the quake hit. Link this Share this Digg this Email Reprints

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