Uncle Sam Sat on Wall........
Uncle Sam Had a Great Fall...
Up above the Deficit so High.......
Always Losing the Far CRY.......[/B]
Uncle Sam Had a Great Fall...
Up above the Deficit so High.......
Always Losing the Far CRY.......[/B]
The dollar fell sharply against the yen but traded little changed against the euro Tuesday, after softer-than-expected producer price inflation and weaker-than-forecast new construction of U.S. homes reinforced expectations the Federal Reserve's interest-rate hiking cycle may have reached an end.
At the same time, the yen staged a recovery, benefiting from comments made by both Japanese and eurozone officials. The Japanese currency had tumbled to a five-month low Monday after the world's leading industrial nations repeated their call for China and other emerging economies to increase the flexibility of their currency exchange rates.
"The dollar is pressured across the board," said Stuart Scrase, a foreign-exchange trader at CMC Markets.
Tuesday's economic data -- coming on the eve of the Fed's next monetary-policy meeting -- had the effect of "not only confirming the Fed will stay on hold tomorrow, but also may have concluded its tightening cycle," he said.
In New York trading, the dollar was quoted at 117.09 yen compared with 117.85 yen late Monday. The euro changed hands at $1.2706, compared with $1.2699.
The British pound traded at $1.8872, compared with $1.8798. The dollar was last at 1.2493 Swiss francs compared with 1.2507 francs.
The euro fetched 148.81 yen compared with 149.71 yen. See live foreign exchange rates.
The Federal Open Market Committee is widely expected to leave key U.S. interest rates unchanged at 5.25% Wednesday, but traders will be closely watching the accompanying statement for hints as to what might happen for the remainder of the year.
Traders are pricing in a 7% chance that the Fed will raise its interest rates to 5.5% this year, down from a 20% chance late Monday. After 17 straight meetings in which it implemented quarter-percentage-point increases in benchmark interest rates, the Fed held interest rates steady at 5.25% on Aug. 8.
Talking up the yen
"Clearly a concerted effort to talk up the yen, particularly on the part of the Europeans, persists," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.
Chief Cabinet Secretary Shinzo Abe said that currencies should reflect economic fundamentals. Meanwhile, an unnamed European official said that it may take some time for the market to digest the message from the Group of Seven meeting that the yen should rise against the euro, Chandler said.
Meanwhile, Japanese Finance Minister Sadakazu Tanigaki said that the euro/yen appreciation was a little unexpected and that the yen should reflect the broad-based Japanese economic recovery, according to Masafumi Yamamoto, an analyst at Citigroup. Tanigaki, however, also said that the G7 meeting hasn't particularly focused on trading in the euro vs. the yen.
Adding strength to the yen's rebound was a government report Tuesday that showed land prices in Japan's top three cities have shrugged off a decades-long deflationary hangover to post their first year-on-year rise since 1990.