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Forexpros – The U.S. dollar was mixed against its major counterparts in U.S. trade Friday, with USD/JPY setting a record low, as dealers reacted to Thursday’s announced settlement by European leaders to tackle the euro-zone’s debt crisis.
In afternoon U.S. trade, the greenback was higher against the euro, with EUR/USD falling 0.25% to hit 1.4153.
Earlier Friday, USD/JPY fell to an all-time low, hitting 75.68, and prompting speculation of looming market intervention from the Bank of Japan to weaken the local currency, as export firms in Japan suffer when repatriating overseas profits.
On Thursday, Japan’s Finance Minister Jun Azumi vowed that Japan would take decisive action to prevent further excessive moves by the yen. The Bank of Japan earlier announced plans for further monetary easing by expanding its asset purchase program by JPY5 trillion to JPY55 trillion.
Azumi repeated on Friday a commitment to take firm steps against the yen’s rise as necessary, and alerted traders of possible currency market intervention from the Bank of Japan.
European officials presented Thursday their long-anticipated plan to address the euro-zone debt threat with an expansion of the European Financial Stability Facility to USD1.4 trillion.
The agreement included a vow from private investors to write-down 50% of their holdings in Greek government debt, as well a recapitalization of European banks with assistance from the International Monetary Fund.
Meanwhile Friday, Fitch Ratings said the plan announced by European leaders was a “positive step” but that the effectiveness of the proposals would depend largely on “greater clarity in the details” and a “full and timely implementation.”
Elsewhere, the Bureau of Economic Analysis reported that personal spending rose to a seasonally adjusted 0.6% in September from 0.2% in the previous month, mostly in line with market expectations.
In late afternoon U.S. trade, the Dow Jones Industrial Average was up 0.04% to 12,209.70, while the Nasdaq Composite Index fell 0.27% to 2,731.25, and the S&P 500 shed 0.18% to trade at 1,282.29.
Meanwhile, the greenback was down against the British pound, with GBP/USD adding 0.12% to hit 1.6188.
The dollar was higher against the Swiss franc but down against the Japanese yen, with USD/CHF up by 0.25% to hit 0.8838 and USD/JPY falling 0.24% to hit 75.77.
The greenback was lower against its Canadian, Australian and New Zealand counterparts with USD/CAD up 0.26% to hit 0.9936, AUD/USD lower by 0.23% to hit 1.0705, and NZD/USD slipping 0.09% to hit 0.8218.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.12% at 75.21.
Kingsbury International Ltd. was scheduled to release its Chicago purchasing manager’s index, widely viewed as a harbinger of changes in the national health of the U.S. manufacturing sector, early next week.
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