SINGAPORE- The dollar extended losses against the yen and euro on profit-taking Monday following solid gains last week, but analysts said upbeat sentiment over the improving US economy would continue to provide long-term support.
The greenback was changing hands at 104.03 yen in afternoon Singapore trade compared with 104.06 yen in New York on Friday.
The euro rose to $1.3679 from $1.3671 while easing to 142.30 yen from 142.31.
“The US dollar is currently being pressured by profit-taking following the rally we saw last week,” Vanessa Tan, an investment analyst with Singapore-based Phillip Futures, told AFP.
The dollar touched a five-year high against the yen last week after the US Federal Reserve’s decision to cut its stimulus by $10 billion to $75 billion a month from January, indicating it is confident that economic conditions are improving.
Investors were also buoyed by the US government’s announcement Friday that economic growth accelerated to an annual rate of 4.1 percent in the third quarter, instead of the previously estimated 3.6 percent pace. Analysts had expected the revision to confirm the 3.6 percent number.
Tan said there are expectations the Fed will gradually but fully pare down its stimulus programme next year by denominations of $10 billion each time its policy-making committee meets.
“Coupled with economic growth, the US dollar is likely to remain supported,” she said.
She added that trading was muted owing to a public holiday in Japan and the approaching holiday season.
The greenback was mixed against other Asia-Pacific currencies.
It rose to 12,253 Indonesian rupiah from 12,250 rupiah in Tokyo on Friday, to Tw$29.95 from Tw$29.91, and to 32.73 Thai baht from 32.60 baht.
The dollar eased to 1,060.15 South Korean won from 1,061.20 won, to 44.41 Philippine pesos from 44.49 pesos, to 61.95 Indian rupees from 62.28 rupees, and to Sg$1.2653 from Sg$1.2661.
The Australian dollar edged up to 89.45 US cents from 88.70 cents. The Chinese yuan changed hands at 17.13 yen from 17.16 yen.