Forexpros – The dollar dipped against the yen on Tuesday, as investors sold the greenback after it soared amid fresh European jitters and also on better than expected budget data out of Washington.
USD/JPY hit 77.85 during early Asian trading, down 0.11% and just up from a session low of 77.84 and off from a high of 77.97.
The pair was likely to test support at 77.14, Thursday’s low, and resistance at 78.00, Monday’s high.
In Japan, the country’s tertiary industry activity index, which measures business demand for services, rose to a seasonally adjusted 0.6% in October, much better than the -0.7% rate that came in for September.
However, the Japanese household confidence rate came to 38.1, below a forecast for 38.3.
Meanwhile in the U.S., the government reported that its federal budget deficit narrowed to $137.3 billion in November, slightly better than the forecast $138.5 billion spending shortfall.
“We’re seeing some signs of better economic growth,” said Gary Thayer, chief macro strategist at Wells Fargo Advisors LLC in St. Louis, according to Bloomberg, stressing the numbers aren’t cause for widespread celebrations.
Still, “we would need to see a much stronger economy to bring down the deficit.”
Meanwhile, the dollar was up against the euro and down against the pound, with EUR/USD shedding 0.06% to hit 1.3196 and Cable rising 0.18% to hit 1.5612.
The dollar firmed earlier when markets decided a Friday E.U. summit failed to allay their fears that leaderhip has the debt crisis tackled.
Markets will be paying to attention to U.S. news later Tuesday to see what the Federal Reserve will do with interest rates and whether Census Bureau retail sales figures suggest a more robust economic recovery.
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