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Dollar dips on U.S. housing data

JIJI

The dollar was weaker around ¥99.50 in Tokyo trading Tuesday, due to selling triggered by a weak reading in U.S. housing-related data released overnight.

At 5 p.m. the dollar stood at ¥99.46-50, down from ¥99.99-100.00 at the same time Monday. The euro was at $1.3193-3194, up from $1.3157-3159, and at ¥131.23-26, down from ¥131.57-59.

In overseas trading overnight, the dollar came under selling pressure and fell below ¥99.50 due to a drop in U.S. long-term interest rates after U.S. existing home sales for June turned out to be weaker than market forecasts, market sources said.

In early Tokyo trading, the dollar fell to around ¥99.10 after Tokyo stocks got off to a poor start.

“Amid the summer holiday season, some investors locked in profits by closing some of their dollar-long positions,” an official at a foreign exchange brokerage said.

But the dollar cut early losses later thanks to demand from real demand-backed investors.

“The dollar attracted buying on dips,” another foreign exchange broker said.

The dollar was also supported by a rebound of Tokyo stocks, rising back to levels around ¥99.50.

Thanks to the rise of the key Nikkei average, “investors apparently felt safe” in buying the dollar, an official at a major Japanese bank said.

But the dollar failed to gain further ground.

“Investors found it difficult to chase higher ground following the weak U.S. existing home sales data,” the foreign exchange broker said.

Now that the closely watched Upper House election is over, some investors moved to liquidate their dollar-long positions and the greenback is expected to stay top-heavy for now, an official at another major Japanese bank said.