In afternoon trading in Tokyo, the U.S. Dollar gained against major currencies because of better than expected durable goods data that reduced worries about the state of the U.S. economy. On May 28, 2008, at 01:00 pm (04:00 GMT), in Sydney, the U.S. Dollar traded at 104.84 Yen, compared to 104.74 Yen, while the Euro traded at $1.5634, compared to $1.5654 in late trading in New York.
As a result of better than expected data about the American economy, coupled with higher prices of crude oil, yields on the U.S. Treasury note increased, prompting investors to purchase more U.S. Dollars.
According to April data on U.S. durable goods, new orders of these goods eased by 0.5% compared to 1% decline predicted by most economists. Investors’ sentiment towards the U.S. Dollar has improved over the past month and analysts are predicting that if this continues, the U.S. Dollar may hit 105.7 Yen very soon. However, if crude oil prices continue to surge and the Federal Reserve is compelled to cut interest rates, even though inflation is on the rise, investors may move out of the U.S. currency.