LONDON, 8 April 2005 — The dollar remained weak against major currencies yesterday as its recent rally ran out of steam, with US bond yields turning lower and concerns over the size of the US current account deficit returning to the forefront of investors’ minds. The euro rose to 1.2909 dollars in late afternoon trade here from 1.2868 late on Wednesday in New York. The dollar traded at 108.42 yen from 108.62 on Wednesday.
The main factor behind the dollar’s recent gains — which took it to two-month highs against the euro and more than five-month highs against the yen — has been the interest rate differential between the United States and the euro zone and Japan, and higher US bond yields, but the rally could not continue indefinitely, analysts said.
The euro was changing hands at 1.2909 dollars against 1.2868 late on Wednesday in New York, 139.96 yen (139.87), 0.6875 pounds (0.6843) and 1.5507 Swiss francs (1.5492). The dollar stood at 108.42 yen (108.62) and 1.2013 Swiss francs (1.2030).
Asian stocks eased in mixed trade yesterday with investors taking to the wings amid a lack of positive leads while keeping a wary eye on interest rates. Only Manila and Shanghai stood out. In the Philippines the main index fell sharply amid fears the central bank will raise interest rates and a possible delay in the government’s crucial tax amendments also undermined sentiment