The US dollar and the Japanese yen edged higher against their major counterparts in early Asian trading on Monday as a slide in stocks across the Asia-Pacific region prompted traders to seek safe-haven assets.
The dollar and the yen often strengthen in times of economic uncertainty as investors opt for lower yielding currencies.
Asian stock markets are trading notably lower today as a sharp setback on Wall Street last Friday on the back of the criminal probe of Goldman Sachs and the oil spill in Gulf of Mexico hurt investors’ sentiment.
Hong Kong’s Hang Seng slipped 1.3%, New Zealand’s NZX 50 index lost 0.1%, South Korea’s Kospi declined 1%, Taiwan’s main index plunged 0.3%, Singapore’s Strait Times index fell 1%, Australia’s S&P 200 index dropped 0.5% and the All Ordinaries index was 0.6% lower.
The Japanese markets are closed in observance of Constitution Day and will remain off until Thursday.
The greenback advanced to a 4-day high of 1.3210 against the euro and 1.5239 against the pound around 9:45 pm ET, compared to last week’s closing values of 1.3225 and 1.5299, respectively. On the upside, the US currency may target resistance levels at 1.32 against the single currency and 1.5140 versus the pound. At present, the dollar is quoted at 1.5255 against the pound and 1.3228 against the euro.
The greenback advanced to 1.0847 against the Swiss franc around 10:10 pm ET from a 6-day low of 1.0745 hit earlier in the session. The dollar-franc pair that closed last week’s deals at 1.0797 is presently quoted at 1.0831. On the upside, the pair may find target around the 1.0860 level in near-term.
The yen advanced to a 4-day high of 86.59 against the Swiss franc, 143.09 against the pound and 124.0 against the euro around 10:10 pm ET and this may be compared to last week’s closing quotes of 87.37, 143.84 and 124.91, respectively. On the upside, the Japanese unit may find resistance levels at 142.20 against the pound, 85.90 versus the Swiss franc and 122.60 against the euro.
The yen also jumped to a 5-day high of 93.85 against the US dollar and 92.22 versus the Canadian dollar by 10:10 pm ET from Friday’s close of 94.03 and 92.34, respectively. The yen is presently trading at 93.99 against the greenback and 92.37 versus the loonie and the next likely target levels are seen at 93.20 and 90.70, respectively.
The yen that rose to a 4-day high of 86.62 against the Australian dollar at the beginning of Monday’s Asian session pared some of its gains shortly and hit a low of 87.19 around 7:50 pm ET. However, the yen started reversing its direction thereafter and is currently trading at 86.87, compared to 86.90 hit late New York Friday.
In economic news from Australia, the TD Securities-Melbourne Institute monthly inflation gauge rose by 0.4% in April, following a 0.5% rise the previous month. The annual inflation rate by this measure was 2.9%, up from 2.5% over the year to March.
The yen moved mostly range-bound against the New Zealand dollar today, trading between 68.70 and 68.20. The kiwi-yen pair that closed last week’s deals at 68.37 is presently quoted at 68.49.
Looking ahead, final Purchasing Manager Index reports from the major European economies for April are expected in the upcoming European session.
From the U.S., personal income and spending for March, ISM manufacturing index for April and the construction spending data for March have been slated for release in the New York session.