Dollar Up In Asia But Gains Limited By Rate Hike Doubts

Dollar up in Asia but gains limited by rate hike doubts

TOKYO, (UrduPoint / Pakistan Point News -6th Sept,2016) - The Dollar edged up marginally Tuesday after the previous day's drop but gains were limited by doubts over a US interest rate hike this month.

But Australia's dollar climbed against the greenback as traders in Sydney bet on the country's central bank keeping borrowing costs on hold. Dealers were still unsure about the ramifications of Friday's data showing a healthy increase in US jobs creation -- indicating an improving economy -- but not strong enough to justify an imminent rate rise.

The news halted a rise in the greenback, which rallied last week in response to comments from Fed boss Janet Yellen suggesting the economy was showing enough improvement to withstand an increase.

Many analysts now forecast a rate rise either in December of January. In Tokyo the dollar bought 103.47 yen, against 103.44 Yen Monday, but well down from the levels close to 104 yen seen at the end of last week.

The euro was at $1.1153 against $1.1191. The single Currency was also at 115.

51 yen from 115.49 yen. Adding to pressure on the yen were comments from Bank of Japan chief Haruhiko Kuroda who repeated a pledge Monday to unleash fresh measures if necessary and waved off talk of scaling back on its massive easing policy.

However, he also acknowledged the downside of the bank's negative rate policy, a plan designed to spur lending but which has hurt commercial banks' profits. Kuroda gave few concrete hints about the bank's plans when it holds a two-day meeting from September 20.

"The speech is being interpreted as meaning that the BoJ has become increasingly uneasy over the use of negative rates and probably won't do much or indeed anything when it convenes later this month," Ray Attrill, global co-head of FX Strategy at National Australia Bank, said in a commentary.

The Australian dollar rose 0.6 percent to 76.28 US cents. David Croy, a senior rates strategist in Wellington at ANZ Bank New Zealand, said in a client note that "the Reserve Bank of Australia is widely expected to leave policy on hold".