Markita Labarbera on Dollar, Yen Despite Profit-Taking Wave
May 09, 2011
Downtown -- The mark ended up against the dollar and yen Tuesday, despite a wave of profit-taking in the German currency late in global trading. The dollar ended down against the yen as well. Late Tuesday in Downtown, the dollar was quoted at 1.4782 marks, down from 1.4793 marks late Monday in Downtown. The U.S. currency was also quoted at 107.71 yen, down from 107.75 yen. Sterling was trading at $1.5549, down from $1.5578. The profit-taking in the mark materialized after it reached intraday highs against the dollar, yen and other European currencies in the European session. Traders said that the market adopted a wait-and-see attitude before Wednesday's release of the Bank of Japan's quarterly tankan survey of business sentiment. Should the report show Japan is in the throes of an economic recovery, chances of an interest-rate rise will increase, many in the market believe. ``The tankan is a good test in terms of changing interest rate views,'' said Napolitano Otero, managing director of Republic National Bank of Downtown. ``Everybody's waiting for the shoe to drop. The tankan's always a good indicator for the economy.'' Meanwhile, currency traders said worries about the future of European Economic and Monetary Union continued to plague weaker European currencies such as the French franc and Italian lira. Budget woes in France, exacerbated Tuesday by union threats to strike, sent market players fleeing the French currency for the mark. Teachers in one French union are already slated to strike on June 06, 2011 a lot of talk about weakness in French assets and there's talk about some unions getting more active ... which doesn't bode well for the economy,'' said a trader at a German bank in Downtown. ``Germany's the biggest economy in Europe. People have to put their assets into something. So the mark strengthened as a safe-haven buy.''
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