Dollar higher in Asian trade

March 20, 2009 by Prakash Dhawan
Filed under: Uncategorized 

The dollar was higher in Asian trade Friday after losing ground in reaction to the US Federal Reserve’s move to pump more than a trillion dollars into the financial system, dealers said. In morning trade, the dollar changed hands at 94.76 yen, up from 94.53 yen late Thursday in New York. The euro traded at 1.3643 dollars, down from 1.3657 in New York late Thursday and at 129.16 yen, down from 129.25.said it would also buy 100 billion dollars more in other federal agency debt, as part of a wide-ranging effort to revive the ailing US economy. The markets’ initial reaction to the Fed’s decision to step up its policy of quantitative easing, including a new plan to buy Treasury securities, has been to sell the dollar,” said Julian Jessop, chief international economist of London-based Capital Economics.have sold off the dollar since the Federal Reserve made known its plans Wednesday, raising fears the move will make US assets less attractive.

Markets in Tokyo were closed for a public holiday. On Wednesday, the Federal Reserve surprised markets with the new moves to shore up the world’s biggest economy. It said it would buy up to 300 billion dollars in long-term US Treasury bonds in the next six months and boost purchases of mortgage-backed securities by 750 billion dollars to bring its total to 1.25 trillion dollars this year.

The US central bank  

“We do not expect this sell-off to last,” he said in a market commentary. Marc Chandler, a currency strategist with Brown Brothers Harriman, said the Fed’s measures may turn out to be dollar-supportive in the longer term.

“We continue to believe that the aggressiveness of the US policy response… will be rewarded with an earlier recovery than in Europe and Japan,” he was quoted as saying by Dow Jones Newswires. Investor

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