USD flat ahead of US retail sales
The U.S. dollar was flat against the yen in quiet Asia trade on Friday as investors refrained from taking lopsided positions ahead of key U.S. data later the day.
Around 0450 GMT, the dollar was at 122.61 yen, compared with Y122.62 late Thursday in New York.
The dollar had tracked a bout of selling overnight after comments by Federal Reserve officials dashed market hopes for stronger signals for a December rate increase.
Risk sentiment worsened slightly amid weakness in Tokyo stocks, with the benchmark Nikkei Stock Average down 0.8% at midday.
But the U.S. currency pared some of its earlier losses as “appetite for (dip) buying still remains strong amid expectations for a rate hike,” said Minori Uchida, head of Tokyo global markets research at Bank of Tokyo-Mitsubishi UFJ.
Still, investors mostly sat on the sidelines ahead of U.S. October retail-sales data.
Federal Reserve Bank of New York President William Dudley on Thursday declined to comment on the timing of a rate increase, though he said it was getting closer and that future rate increases would likely come at a slow pace.
Fed Vice Chairman Stanley Fischer said Thursday a strong dollar had already delayed the Fed’s interest-rate increase, but said it “may be appropriate” for the central bank to begin raising rates next month.
Mr. Uchida said expectations for a Fed rate increase often worsens risk sentiment, especially because of the debilitating effect of U.S. monetary tightening on emerging economies.
This causes a higher dollar but also helps strengthen the yen, widely considered a safe haven in times of financial instability. As a result, “the dollar doesn’t go much higher against the yen,” said Mr. Uchida, making it top heavy around Y123 or Y124.
The euro declined to $1.0792 midday from $1.0808 late Thursday. It was at Y132.32 from Y132.52 previously.
The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was up 0.08% at 90.06.
