Dollar recovers against Japanese yen, hits record low against Swiss franc
The greenback fell to a 3 1/2-week low of 81.81 against the Japanese yen as yen was supported by robust Japanese economic data. Japanese factory output rose by 1.0% m/m in November,
the first time in six months while Japan’s retail sales also rose by 1.3% m/m in November, much stronger than economists’ forecast of a rise of 0.2%. The pair tumbled from Tokyo high of 82.81 to as low as 81.81 in NY morning, however, price staged a strong rebound as dollar was supported broadly after U.S. bond yields rose following a weak 5-year Treasury note auction. In addition, the dollar fell to a fresh record low of 0.9435 against the Swiss franc as Swiss corporate sold the pair for year-end repatriation.
In other news, Japanese Finance Minister Yoshihiko Noda said foreign exchange moves had been one-sided over the past week and he would be ready to take decisive steps when needed.
The single currency initially rallied on active buying from sovereign names in Asian morning and price extended intra-day rise to a high of 1.3275 in Europe after triggering heavy stops at 1.3200/10, however, euro fell sharply from there as certain big players unloaded euro in NY session. Euro extended its intra-day decline after the release of the S&P/Case-Shiller survey which showed price of American single-family homes fell by 1.0% m/m and 0.8% y/y versus the forecast of -0.6% and -0.1% respectively. Euro nose-dived to 1.3093 in NY session before stabilizing.
The British pound initially rose in tandem with euro to 1.5489 before staging a pullback to 1.5412. Although cable briefly climbed to 1.5514 in Europe, price later nose-dived to 1.5345 in NY before stabilizing.
Economic indicators to be released on Wednesday include:
Germany CPI data and Swiss KOF indicators.