Yen still riding post-election high; US dollar moves little

Story link: Yen still riding post-election high; US dollar moves little

The news that US retail sales was slower than expected overall in August did not have too much of an effect on the US dollar on Wednesday. The fact that most of the decline was accounted for by a large decline in automobile sales and that most other sectors actually saw gains in sales during the month showed, according to most analysts, that the US economy as a whole continued to do fairly well.

The dollar was down a fraction to $1.2282 in relation to the euro and fell 0.1 percent to $1.8242 against sterling.

The yen was still being helped by the outcome of parliamentary elections last Sunday on the expectation that the continuation of Prime Minister Junichiro Koizumi’s government will promote more economic reform and allow the recovery to continue. The yen was also aided by a statement from the deputy governor of the Bank of Japan that its very loose monetary policy is approaching its end.

Then yen was up 0.5 percent to ¥110.21 in relation to the US dollar and was also up 0.5 percent to ¥135.37 against the euro.

The New Zealand dollar gained 0.8 percent to $0.7078 in relation to the US dollar on a hike of 1.8 percent in retail sales in July, leading most analysts to expect that interest rates there will remain at 6.75 percent when the Reserve Bank meets on Thursday.

Meanwhile, the Slovakian koruna was down by 0.5 percent early in the day as the nation’s parliament did not open for the third day in a row. The koruna recovered, however, to close fractionally higher versus the euro at SK38.425.