US Dollar Holds Near 2-Month High Vs Yen

November 13, 2013

The US dollar retraced slightly against the yen in the Asian session but is still hovering near a two-month high. The greenback is being broadly supported by renewed views of Fed tapering after a series of strong economic data. The dollar is also drawing strength from a surge in US bond yields.

Some analysts speculate that the US central bank could be on the path to begin reducing its stimulus as early as December. The Fed is very dependent on data and the strong US payrolls on Friday is good news for them, as there are signs the US economy is recovering.

The dollar retraced 0.2 percent to 99.46 yen in the Asian trade. On Tuesday the dollar hit a two-month high of 99.80 yen. On the week so far, the dollar has gained about 0.4 percent.

The dollar index, which gauges the US dollar's value against a basket of six major currencies, also held near the two-month high of 81.482 reached on Friday.

Meanwhile, some Fed policymakers are also supporting tapering. On Tuesday, Atlanta Fed President Dennis Lockhart, did not rule out a tapering in December, though he also said the Fed should keep policy very easy. The next Fed meeting is on December 17-18.

The euro was steady versus the dollar in the Asian session, maintaining its gain from a seven-week low of $1.3295. 

The British pound hovered near a two-month low of $1.5854 reached yesterday after UK inflation fell more than expected. Sterling will be driven by UK jobs data today as well as the Bank of England's quarterly inflation report.

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