The dollar has a high risk of falling versus the yen and adding to its biggest slide in six months, according to JPMorgan Chase & Co., with global markets roiled by concerns that growth and inflation are slowing.
The Bloomberg Dollar Spot Index declined for a second day as traders pushed back expectations for a U.S. interest-rate increase to December 2015, after earlier this month seeing a rise as likely to come in July. Australia’s dollar fell on speculation yesterday’s 1.3 percent advance was unwarranted. China has shown “some renewed willingness” to let the yuan strengthen, the U.S. Treasury Department said in a report. South Korea’s won rose.
“There’s a general unease across markets,” said Naohiro Nomoto, an associate for foreign-exchange trading at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “People seem to be dropping their long dollar-yen positions, and taking a watch-and-wait attitude,” he said referring to wagers on gains in the U.S. currency.
The dollar was little changed at 106.07 yen as of 11:30 a.m. in Tokyo after dropping 1.1 percent yesterday, the biggest loss since April 8. The greenback traded at $1.2828 per euro after weakening 1.4 percent yesterday to $1.2838. Japan’s currency was at 136.04 per euro from 135.99.
The Bloomberg dollar index slid 0.1 percent to 1,060.33, after yesterday’s 0.7 percent decline, which was the steepest drop since Oct. 6. Hedge funds and other large speculators had raised their net bullish dollar bets versus eight of its major peers to a record 313,878 contracts as of Oct. 7, according to data from the Washington-based Commodity Futures Trading Commission.
Source: Bloomberg (16 Oct 2014)
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