CURRENCIES
May 27, 2011, 8:21 a.m. EDT
Dollar falls after U.S. Treasury yields drop
Swiss franc climbs to all-time high against greenback
By Lisa Twaronite and Greg Morcroft, MarketWatch
NEW YORK (MarketWatch) — The dollar fell Friday after U.S. Treasury yields dropped, leading Asian investors to sell the greenback.
Investors are also eyeing U.S. economic data, on personal incomes and spending as well as on pending home sales.
The yield on 10-year Treasury notes dropped as far as 3.05%, the lowest level for the benchmark security since Dec. 7. It underscored market perceptions that the U.S. economic recovery’s hit a slow patch.
The dollar index DXY -0.63% , which measures the U.S. unit against a basket of six major currencies, fell lately to 75.06, down from 75.598 late Thursday.
Despite lingering fears about European sovereign-debt woes, particularly those of Greece, the euro EURUSD +0.9056% nudged up to $1.4232, up from $1.4128 in late North American trading Thursday. See real-time currency quotes and tools.
“We expect there to be political will to find sufficient measures to close the funding gap, enable a disbursement of aid, and avoid an early default,” said Sue Trinh at RBC Capital Markets in reference to Greece.
“The realization of such could see a further squeeze” in the euro, she said in a note to clients. “Until then, choppy trade will persist; note that liquidity will be thinned” by U.K. and U.S. market holidays on May 30, she said.
Also Friday, the dollar hit an all-time low against the Swiss franc, falling to 85.34 centimes on the EBS trading platform, and was last buying 85.77 centimes, down 0.9%.
Against the Japanese yen, the dollarUSDYEN -0.26% bought ¥81.07, down from ¥81.33 late Thursday.
Currency markets mostly shrugged off data showing Japan’s core consumer price index rose in April for the first time in more than year.
CPI rose 0.6% from the same month a year ago, matching the median forecast in a poll of 12 economists surveyed by Dow Jones and Nikkei. Core CPI excludes fresh food, but includes energy.
Rounding out trading in the dollar, the British pound GBPUSD +0.2197% rose to $1.6425 from $1.6385 late Thursday as the Australian dollar AUDUSD +0.4609% reached $1.0684 from $1.0630.
Lisa Twaronite is MarketWatch's Tokyo bureau chief.Greg Morcroft is MarketWatch's financial editor in New York.
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