Forexpros – The U.S. dollar fell to a three-day low against the yen on Monday, as renewed concerns over the debt crisis in the euro zone and the outlook for global economic growth supported safe haven demand.
USD/JPY hit 81.12 during early European trade, the pair’s lowest since April 18; the pair subsequently consolidated at 81.16, retreating 0.44%.
The pair was likely to find support at 80.81, the low of April 13 and resistance at 81.73, the high of April 19.
Sentiment strengthened on Friday after the Group of 20 leading economies agreed to boost the International Monetary Fund’s lending capacity by USD430 billion, to help shield the global economy from the debt crisis roiling the euro zone.
However, concerns remained over whether the new IMF firewall will be enough to ease investor concerns over the crisis, after the U.S. did not contribute to the increase.
Meanwhile, markets were also jittery amid signs of a slowdown in Chinese manufacturing activity for the sixth consecutive month.
A preliminary report from Markit showed earlier that its manufacturing purchasing managers’ index for China hit 49.1 in April following a reading at 48.3 the previous month.
On the index, a reading above 50.0 indicates industry expansion, below indicated contraction.
Elsewhere, the yen was sharply higher against the euro with EUR/JPY dropping 0.84%, to hit 106.86.
Sentiment also came under pressure amid uncertainty over the result of France’s presidential election, after President Sarkozy performed poorly against challenger Francois Hollande in the first round of the vote.
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