3 August 2001, 08:56 Asia FX Midday: Consolidation sets in before US jobs data
Hong Kong, Aug. 3 (BridgeNews) - Consolidation set in across the board
in Asian Friday morning trade as the currency market awaited the release
of U.S. July employment report due out later Friday. The dollar remained
relatively weak, although it stayed above some key technical resistance
levels against the major currencies. The Japanese currency was buoyed by a
faltering Japanese stock market although the Nikkei did not fall far
enough to have much impact.
Dollar/yen found U.K. names offering above 124.00. It later retreated
to 123.72 on U.S. investment bank selling out of Asia and U.S. momentum
fund selling.
The pair's short dated options volatility fell slightly, but there was
a growing interest in buying out of the money low delta dollar/yen call
options with a strike price of 130.00.
This suggested that some strategic players have begun to take a
long-term bullish strategy, while the option premium is cheap.
Friday's meeting of Japan's Council on Economic and Fiscal Policy will
cover discussion of guidelines for budget estimates by government
ministries and the timetable for economic reform, a Cabinet official said.
The Nihon Keizai Shimbun reported Friday the Finance Ministry and the
Council on Economic and Fiscal Reform, which are discussing budgetary
request guidelines, are considering cutting fiscal 2001-02 (April-March)
general expenditure by about 700 billion yen to around 48 trillion yen.
This would be the first time in four years that the guidelines have
requested a reduction in spending, the business daily said.
The major business daily also reported that the Japanese government
and the U.S. administration agreed they will have a high level economic
meeting in Tokyo in the middle of September.
The meeting will cover macro-economic policy of the U.S. and Japan,
Japan's structural reform and U.S.-Japan trade issues.
Meanwhile, the Nikkei 225 Stock Average was down 70.92 points, or
0.6%, to 12,328.28 at midday, as profit taking set in, despite gains on
Wall Street overnight.
In other currency trading, euro/dollar declined to 0.8816 on position
squaring and euro/yen selling from funds.
The cross was capped by former resistance at 109.50, falling back to
109.12.
© 1999-2024 Forex EuroClub
All rights reserved