By: Barbara Zigah
The U.S. Dollar held fast to multi-year lows against the Japanese Yen in Asian trading today. As reported at 2:37 p.m. (JST), the greenback held at 82.86 Yen, a slight gain from the 15-year trough of 82.75 Yen struck yesterday, leaving traders to wonder whether or not the Japanese Ministry of Finance would intervene during the Asian trading session.
Some investors don’t see intervention occurring until after the Group of Seven meeting planned for this weekend. Many see a discussion on the evolution of a currency “war” as the main focus.
Timothy Geithner, the Secretary of the U.S. Treasury Department, noted yesterday that global financial institutions should persuade developing nations to allow their currencies to appreciate, as the risk of competitive depreciation measures by other central banks would pose a threat to the global economic recovery.
One forex manager in Japan noted that Geithner’s commented were an indication that a weaker dollar is desirable for the U.S. economic recovery.
In addition, the U.S. Dollar is swiftly approaching a 27-year trough versus the Australian Dollar, which gained strength on speculation that positive jobs outlook will translate into a rate increase by the Australian central bank.
Against the greenback, the Australian Dollar traded at $0.9845, a 2-year peak. Resistance is pegged at $0.9851, and should the Aussie break through, it will set a new 27-year high. The release of September’s employment figures showed an increase of approximately 50,000 new jobs, beating predictions by more than 100%.