Dollar drops but respite in sight if economy dims


The US dollar plumbed a record low against the yen and weakened against the euro on Friday, but respite may be in sight for the greenback if the global economic landscape gets gloomier and feeds a safe-haven bid.

The euro has gained about 0.3 per cent against the dollar so far in August while the greenback has lost around 1.2 per cent versus the yen.

The dollar fell against the yen on Friday by a Wall Street Journal report cited Japan’s top currency official saying Japanese authorities do not plan to intervene often.

The dollar smashed through its previous record low of 76.25 set in March to fall below 76 yen on trading platform EBS. The dollar later rebounded to trade 0.1 per cent lower at 76.48 yen, marking a 5.8 per cent loss so far this year.


Growing volatility in global markets has raised investors’ appetite for the traditional safe-haven currencies: the yen and Swiss franc. But there has been diminishing volatility in the yen, with its daily price action narrowing.

“That speaks to the ongoing worries over the situation and isn’t something the Bank of Japan on its own can resolve by a wave of intervention,” said Andrew Wilkinson, senior market analyst at Interactive Brokers in Greenwich, Connecticut.

Investors are awaiting Federal Reserve Chairman Ben Bernanke’s speech on Aug. 26 in Jackson Hole, Wyoming, for hints on how policymakers plan to handle the turmoil in financial markets.



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