Wednesday, 26 November 2014

Dollar marks time ahead of holiday, U.S. data


Australian one dollar coins surround a U.S. twenty dollar note in this photo illustration taken in Sydney July 27, 2011. REUTERS/Tim Wimborne

Australian one dollar coins surround a U.S. twenty dollar note in this photo illustration taken in Sydney July 27, 2011. REUTERS/Tim Wimborne

(Reuters) - The dollar edged lower against the yen on Wednesday but mostly stuck to recent ranges ahead of the U.S. Thanksgiving holiday, while the Australian dollar wallowed near four-year lows against the greenback.

A spate of U.S. data is slated for release ahead of Thursday's holiday, including the final November consumer sentiment and October new home sales. While Friday is not a holiday, U.S. trading activity is expected to be light.

"People are just squaring up ahead of the holiday," said Bart Wakabayashi, head of forex at State Street in Tokyo.

"Overnight, we got some mixed U.S. data. It wasn't shiny, but relatively speaking, the U.S. continues to be the leader," he said.

The U.S. economy grew at a much faster pace than initially thought in the third quarter, with the Commerce Department hiking its estimate of GDP growth to a 3.9 percent annual pace from the 3.5 percent rate reported last month to reflect upward revisions to business and consumer spending, as well as to inventories. This underscored the U.S. economy's resilience compared with Japan's recession, an anaemic euro zone and a slowing China.

But taking some of the shine off the GDP news, separate U.S. data showed consumer confidence sliding to a five-month low and a further moderation in house price gains.

Undermining the U.S. currency, the yield on benchmark 10-year U.S. Treasury notes fell after a solid 5-year sale on Tuesday as well as month-end buying. It was last at 2.253 percent in Asian trading, down from its U.S. close of 2.261 percent on Tuesday.

The dollar bought 117.85, down about 0.1 percent on the day and below its seven-year high of 118.98 last week.

The euro last traded at $1.2469, nearly flat on the day and well above a two-year low of $1.2358 touched on Nov. 7, after a second attempt to break that level failed.

That left the dollar index also flat on the day at 87.923, below its four-year peak of 88.440 set on Monday.

The Australian dollar stole the Asian spotlight, after it dropped almost a full U.S. cent as far as $0.8514 on Tuesday, reaching a low not see since July 2010. It was last at $0.8538, up about 0.1 percent on the day.

Comments from Reserve Bank of Australia Deputy Governor Philip Lowe contributed to the selling, although his remarks about the currency being overvalued were in line with what the central bank has been saying for months.

"The AUD sits squarely at the bottom of the G10 pack in the past 24 hours and heading into the NY close, with a fresh slide in iron ore prices, now to below $70 for the first time since June 2009, adding pressure," said Ray Attrill, global co-head of FX strategy at National Australia Bank.




By Lisa Twaronite and Ian Chua

TOKYO/SYDNEY Wed Nov 26, 2014 4:30am GMT

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