Many people are on vacation this week, and, not surprisingly, it's been another thin day of trading on the forex market so far. The dollar is making small gains in the muted trading conditions.
With only one trading day left before the new year, "it's very quiet out there," said Jason Bonanca, currency strategist at
Credit Suisse First Boston
. The dollar, which has been falling recently because of worries about domestic economic health and slowing growth, firmed against most major world currencies this morning.
The most significant news continues to be the weakening yen, a victim of the faltering Japanese economy. The economy itself has "been underlined with a shift in the official commentary," Bonanca said.
Japanese Finance Ministry
foreign exchange chief Haruhiko Kuroda said earlier today that the recent weakening of the yen was not wrong given the disparity in growth between Japan and the U.S. He also predicted further gains for the euro in the near future.
This morning the yen hit 16-month lows versus the dollar and 10-month lows versus the euro. This is the third straight day the Japanes currency has set these record lows. The dollar/yen cross was recently at 114.65, up from yesterday's close of 114.29. The euro/yen cross was trading at 106.54, up from its last close of 106.27.
After gaining yesterday on the euro, the dollar is again firming against the European single currency today, with the euro recently trading at $0.9291, down slightly from yesterday's close of $0.9304. Still, the euro has been strengthening overall in recent weeks: That currency has gained for seven consecutive days and is well off the lows it reached in the fall. "The trend is straight north", said Bonanca, referring to the general trend of the euro versus the dollar.
The British pound is slipping against the dollar, at $1.4911, down from a close yesterday of $1.4967. The Australian dollar is also losing to the U.S. currency today. The Aussie buck was most recently at $0.5553, down from yesterday's close of $0.5587.
Our neighbors to the north are once again bucking the global trend, as the Canadian dollar is making gains on the U.S. currency. The U.S. currency was recently trading for C$1.5074, down from yesterday's close of C$1.5116.
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