Dollar Clings To Narrow Ranges As Caution Dominates Markets After Rout

www.oann.com | 1/9/2013 | Staff
Caris (Posted by) Level 3
SINGAPORE (Reuters) – The dollar traded in tight ranges against most of its peers on Friday as investor appetite for riskier assets remained shaky while the euro stayed near two-month lows after the European Central Bank failed to convince markets that rates would rise.

The Japanese yen traded relatively unchanged at 112.33 to the dollar, though it had weakened to 112.65 on Thursday as risk appetite made a cautious return. The yen tends to fall as confidence improves in financial markets.

Analysts - Markets - Woods - Risks - Trade

Analysts don’t think the markets are out of the woods yet, however, with risks such as rising trade tensions, Italy’s budget woes, geopolitical uncertainties and U.S. corporate earnings persist.

“The risk sentiment is still quite fragile. Overnight, we had Amazon and Alphabet declare results which were not that cheerful. I expect the yen to re-test its recent highs,” said Sim Moh Siong, currency strategist at Bank of Singapore.

Euro - Friday - Low - Session - ECB

The euro traded flat at $1.1375 on Friday, having hit a two-month low of 1.1353 in the previous session, after ECB President Mario Draghi failed to convince traders that the bank could pursue monetary tightening after next summer as political and economic uncertainties grow in the monetary union.

The ECB reaffirmed on Thursday that its 2.6 trillion euro ($2.97 trillion) asset purchase program would end this year and that interest rates could rise after next summer.

Policy - Guidance - June - Outlook - Turmoil

The policy guidance has been consistent since June, even though the economic outlook has darkened while political turmoil in Italy looms over the currency bloc.

Analysts said markets remain skeptical about the ECB rates given inflation remains tepid.

Risk - Guidance - Interest - Rates

“The risk, therefore, is that the guidance that interest rates...
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