Dollar Slightly Down Early Friday In Tokyo, BoJ`s Fukui And US Inflation In Focus, Friday, June 15, 2007 1:30:14 AM

The U.S dollar traded lower across the board during the early Tokyo deals on Friday. The deals took place amid release of the Japanese tertiary industry activity data for April, which gave out better-than-expected results. The activity grew 1.7%, while analysts had been expecting a 1.5% growth in the month.

Earlier on the day, the greenback had shown strength across the board as the U.S May producer prices data topped the expectations. However, much of those gains were given back before the dollar pairs started moving sideways in the late New York deals.

Largely, in spite of the recent fall, the dollar held its 4 Ѕ year high against the Japanese unit and against the franc, the buck broke above its February 22 resistance level of 1.2435 on Wednesday and holding this level, it is now aiming the February 12 resistance of 1.255. Meanwhile, the greenback held its downward trend against the euro and the pound off the multi-month low set on June 8th.

The markets now turn towards the speech by Fukui, the governor of the Bank of Japan, which is scheduled to be delivered shortly. The BoJ had decided to hold the uncollateralized overnight call rate at 0.5% in its just concluded policy board meeting as it was widely expected. However, investors will be keenly waiting for Fukui`s comments, which are likely to give indications about the future moves of the central bank.

After Fukui, the markets have the European session with the euro-zone Q1 labor costs, the euro-zone April trade balance and the Swiss adjusted retail sales details for April, due. But investors will be keenly waiting to scrutinize the U.S releases including the May month inflation data awaited in the North American session on the day, which are highly likely to move market before it closes the week`s deals.

The U.S dollar moved sideways against the euro during the late New York deals on Thursday, but the pair has ticked down in the early Asian deals on Friday. The Tokyo deals took place amid release of the Japan tertiary industry activity growth index for April. The pair moved out of a range that was limiting between 1.3307 and 1.3314 and collected as low as 1.3328 by about 10:20 pm ET. Thereafter, it has shed a few pips, and is now trading near 1.332. As of now, 1.3260 and 1.3400 can be the likely level of resistance and support for the pair in the near term.

The U.S. dollar slipped briefly against the yen amid the recent Japanese data release, but largely, the pair saw choppy trading during the late New York deals on Thursday and early Asian trading on Friday. After hitting a new multi-year high of 123.11 amid release of the larger-than-expected U.S producer price data in the previous session, the pair looked consolidating around 123.0. As of now, 122.0 and 125 can likely be the support and resistance levels for the greenback in the near term.

After hitting Thursday`s daily low at 1.9707 by about 2:00 pm ET, the dollar edged up to a loose range against the sterling. The pair remained sideways between 1.9687 and 1.9699 in late New York trading but it slipped in the early Tokyo deals. The pair thus leveled its recent low by about 10:20 pm, but has moved on to 1.969 lately. As of now, the likely upside and downside targets can be seen around 1.968 and 1.982 respectively.

The greenback hit its Thursday`s high against the Swiss franc at 1.2467 by about 2:00 pm ET, and thereafter, it moved sideways. However, amid the Japanese data release in early Tokyo session on Friday, the pair weakened and collected as low as 1.2438 by about 10:20 pm ET. Lately, the buck has picked up a few pips and is trading near 1.245. As of now, the near term resistance and support levels for the pair are seen around 1.257 and 1.235 respectively.

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