Dollar Gains On Euro, Stuck Near 15-year Low Versus Yen
The dollar held its ground versus other majors on Monday morning, extending its relief rally from the previous session against the euro and sterling. However, the dollar remained little changed from a recent 15-year low against Japan's yen.
Traders are taking time to assess Friday's comments from Federal Reserve Chairman Ben Bernanke, who suggested the central bank is prepared to use unusual measures to support the fragile economy, but stopped short of detailing any quantitative easing program.
Without specifics on the size and scope of further asset purchases, the dollar firmed up on speculation the package may not be as extensive as previously assumed. Whatever program is decided on, it will likely dwarf support measures from Japan, preventing a dollar rally against the yen even though Japanese officials are acting to devalue their currency.
The Fed is on watch against deflation, Dallas Fed President Fisher said this morning on CNBC, noting that falling prices would discourage economic activity. Still, Fisher pointed out that inflation is slowly rising.
The dollar hovered around Y81.25 versus the yen. A move below Y79.80 would take the dollar to its lowest ever.
Meanwhile, the buck rose to $1.3890 versus the euro, edging away from an 8-month low of near 1.4150. The dollar saw similar gains versus the sterling, improving to $1.5850 from a last week's 8-month low near 1.6100.
The dollar also moved away from record lows against the aussie and Swiss franc, while rising above C$1.0200 versus Canada's loonie.
On the economic front, the US Treasury Department will release its report on the flows of financial instruments into and out of the country for July at 9.00 a.m. ET.
At 9.15 a.m. ET, the US Federal Reserve will release its report on industrial production during September. Economists estimate 0.2% growth in industrial production for September, while capacity utilization is expected to come in at 74.8%.
The National Association of Homebuilders will release the results of its October survey on homebuilders' confidence at 10.00 a.m ET. Economists predict that the index remained unchanged at 13 for the month.