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Dollar tops ¥102.10 on strong U.S. consumer confidence

JIJI

The dollar stayed solid at levels above ¥102 in Tokyo trading Wednesday but failed to extend gains ahead of key U.S. economic events later in the day.

At 5 p.m., the dollar stood at ¥102.16-17, up from ¥101.90-90 at the same time Tuesday. The euro was at $1.3397-3401, down from $1.3432-3432, and at ¥136.88-91, against ¥136.87-88.

In early trading, the dollar was solid around ¥102.10, carrying over its strength from overnight trading overseas, where the greenback attracted purchases on favorable U.S. economic data.

The U.S. Conference Board’s consumer confidence index for July, released Tuesday, rose to the highest level in six years and nine months.

The better than expected reading “fueled hopes that upcoming U.S. economic data releases, such as the government’s jobs data for July, will show improvement as well,” an official at a major foreign bank said.

The dollar later briefly came under selling pressure after the Nikkei average slipped into negative territory at one point.

After Tokyo stocks turned higher, the dollar rose back to around ¥102.10. The dollar was also supported by demand from Japanese importers for settlement purposes, market sources said.

Still, an official at a foreign exchange broker said that “the dollar is facing selling pressure from Japanese exporters and individual investors once it tops ¥102.”

After being caught in a narrow range, the dollar drew renewed buying after European investors joined the market in late hours, market sources said.

Trading was slow in general before key U.S. economic events later in the day, including gross domestic product data for April-June and Automatic Data Processing Inc.’s U.S. employment report for July.

Market participants were also waiting for a statement after a meeting of U.S. Federal Reserve policymakers, market sources said.

“A wait-and-see mood was strong as investors want to see results of those events,” an official at a foreign exchange margin trading service firm said.