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Monday 21 October 2013

Dollar moves higher vs. yen, U.S. data in focus


The dollar moved higher against the yen on Monday, but gains remained limited amid concerns that the economic impact of the U.S. government shutdown will prompt the Federal Reserve to postpone plans to reduce stimulus measures.

During European late morning trade, the dollar pushed higher against the yen, with USD/JPY rising 0.30% to 98.07.

The yen slid after data released on Monday showed that Japan posted a trade deficit of JPY932.1 billion in September, as export growth slowed. It was the 15th consecutive monthly deficit, the longest run on record.

The dollar received an additional boost after Bank of Japan Governor Haruhiko Kuroda reiterated Monday that the bank would stick to its stimulus program and added that the economy was on track to reach the bank's 2% inflation target.

The dollar remained under pressure as concerns over the impact of the 16-day shutdown on the U.S. economic recovery fuelled expectations that the Fed would delay plans for rolling back its asset purchase program until at least the beginning of next year.

Investors were awaiting U.S. data releases later in the week after the shutdown delayed the release of some key economic reports. The September nonfarm payrolls report, which had been originally scheduled for release on October 4, was due on Tuesday.

The euro slipped lower against the dollar, with EUR/USD dipping 0.07% to trade at 1.3675.

Elsewhere, the dollar was almost unchanged against the pound, withGBP/USD edging down 0.03% to 1.6159.

The dollar was slightly higher against the Swiss franc, with USD/CHF up 0.18% to 0.9035.

The greenback was almost unchanged against its Australian and Canadian counterparts, with AUD/USD dipping 0.06% to 0.9669 andUSD/CAD inching up 0.02% to 1.0296. The greenback was higher against the New Zealand dollar, with NZD/USD down 0.41% to 0.8472.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up 0.08% to 79.75. 

The U.S. was to release private sector data on existing home sales later Monday.

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