Updated at 3:26 p.m., Thursday, December 28, 2006
Dollar approaches two-month high against the yen
Bloomberg News ServiceNEW YORK The dollar approached a two-month high against the yen today and pared losses versus the euro after U.S. reports showed consumer confidence and existing home sales unexpectedly rose.
The U.S. currency erased its earlier decline against the yen as the data may reduce speculation the Federal Reserve will cut borrowing costs next year to spur growth. The euro advanced against the dollar and reached a record high versus the yen after European Central Bank policy member Yves Mersch said rates in the region are still "low."
"People realize maybe they got overly bearish for prospects on the U.S. economy," said Paul Barrett, chief foreign-exchange trader at JPMorgan Private Bank in New York, which oversees about $100 billion. "I think the Fed's going to be on hold. It's going to be dollar positive, or at least prevent any dollar weakness."
The U.S. currency traded at 118.94 yen at 11:50 a.m. in New York from 118.87 yesterday. The dollar touched 119.23 on Dec. 26, the strongest since Oct. 25. It also traded at $1.3159 per euro from $1.3115.