TOKYO: The dollar headed for a weekly loss versus most of its major peers before data today forecast to show gains in U.S. consumer prices slowed, feeding speculation the Federal Reserve will keep an accommodative policy.
The greenback traded 0.4% from a six-week low against the yen on prospects Fed Bank of New York President William C. Dudley may reiterate that he supports the central bank’s pledge to hold interest rates low through late 2014. The yen erased earlier gains after South Korea said the North attempted to launch a rocket today. Singapore’s dollar touched a one-month high after a rebound in economic growth prompted the central bank to tighten monetary policy to curb inflation.
“Expectations for further easing are a factor that weighs on the dollar,” said Takuya Kawabata, a researcher at Gaitame.com Research Institute Ltd. in Tokyo, a unit of Japan’s largest currency-margin company. “Easing expectations have emerged in part because the U.S. recovery is slower than the Fed thinks it should be.”
The dollar was little changed at 80.90 yen at 9:31 a.m. in Tokyo, after sliding to 80.57 on April 11, the weakest since Feb. 29. It is set for a 0.9% drop this week. The U.S. currency fetched $1.3191 per euro from $1.3188, and has dropped 0.7% since April 6. Singapore’s currency climbed to S$1.2469 per dollar, the most since March 2, before trading at S$1.2477, or 0.5% higher than the close yesterday. (Bloomberg/T07)
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