ASIA FX: US Dollar Rangebound Ahead of Retail Sales Data | iMarketNews.com
TOKYO, June 13 (MNI) - The U.S. dollar was rangebound in Asia on Monday, extending a rebound versus the yen for a third straight day in flow-driven trading, as the market awaits the release this week of U.S. data for fresh trading leads.
The euro also drifted sideways amid lingering concerns about the debt situation in Greece ahead of a meeting on June 20 of the European Union's finance ministers.
"While there is a good chance of the dollar resuming its broad-based slide, depending on the outcome of this week's data, there is also an emerging view that dollar-yen has hit bottom during the recent downtrend, given firm support below the Y80-mark," said Kengo Suzuki, forex analyst at Mizuho Securities.
U.S. retail sales, due on Tuesday, will show a decline of 0.3% in May, a reversal from +0.5% in the previous month, according to a survey of economists by Market News International.
New York Fed President William C. Dudley said on Friday he expects a "moderate" economic recovery to be sustained, while warning that "the recent disappointing data suggest that downside risks to the outlook" have increased.
Fed Chairman Ben Bernanke also said last week record monetary accommodation is still needed to boost a "frustratingly slow" U.S. economic recovery.
As a result, yields on Treasury's 10-year notes hit 2.92% on Thursday, the lowest level since Dec 3.
Dollar-yen was at Y80.53 following a Y80.24 to Y80.69 range so far in Asia and versus Y80.34 in late New York on Friday.
The dollar earlier staged a run-up on interest from Japanese importers and Tokyo fixing-related demand, taking out stop-loss orders at Y80.60.
"Judging from recent position data on dollar-yen, it seems that the dollar is ripe for a technically driven rebound," Suzuki said.
Speculative accounts flipped to a net yen long position as of June 7, according to data from the U.S. Commodity Futures Trading Commission.
Speculative accounts had a net yen long position of +17,631 contracts, vs the net yen short of -1,648 contracts seen in the previous week. Only on April 19, these accounts had a net yen short of -52,983 contracts, which was then the largest net yen short since May 4, 2010.
Meantime, the euro was slightly firmer on short-covering, but its top-side is capped amid concerns about the region's sovereign debt problem.
Germany's bank association backed government proposals to involve private creditors in a second bailout for Greece, while European Central Bank President Jean-Claude Trichet said last week the ECB may not roll-over Greek debt.
"A opinion gap among EU members may weaken risk sentiment and yield some downward pressure on the euro," said Toshiya Yamauchi, senior analyst at Ueda Harlow Ltd.
The euro was at $1.4345 following a $1.4319 to $1.4358 range so far and versus $1.4328 on Friday, while it stood at Y115.51 versus Y115.11 in late New York.
The New Zealand dollar tumbled after Christchurch was struck by a magnitude 5.5 aftershock.
The currency traded at $0.8122 versus $0.8203 in New York on Friday.
The Dollar Index was up 0.02% at 75.27.
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