TOKYO–The dollar weakened in Asia on Friday as traders looked ahead to a speech by U.S. central bank chief Ben Bernanke later in the day hoping he would signal the launch of fresh stimulus measures. The greenback eased to 78.40 yen against 78.59 yen in New York trade late Thursday, while the euro strengthened to US$1.2516 from US$1.2504 a day earlier. Against the Japanese currency, the euro fetched 98.12 yen in Tokyo trade, from 98.26 yen. Attention is on Bernanke’s speech Friday at an annual central bank economic policy meeting in Jackson Hole, Wyoming amid speculation he will signal new stimulus for the sluggish U.S. economy.
There are hopes he will indicate a third round of bond-buying, or quantitative easing, known as QE3. Such measures would put downward pressure on the U.S. dollar. “(But) I think a lot of the QE3 has been discounted out of pricing. You have seen risk currencies come off and equities come off slightly as well,” said HSBC Chief Manager for New Zealand Daniel Brdanovic. Brdanovic added that the U.S. central bank was unlikely to move ahead of a European Central Bank meeting next week, and before a German court issues its ruling on the constitutionality of the eurozone bailout fund in mid-September.
“There’s still quite a bit to come,” he told Dow Jones Newswires. Daisaku Ueno, senior foreign exchange and fixed income strategist at Mitsubishi UFJ Morgan Stanley, said that while Bernanke may hold off fresh stimulus, he was unlikely to dash hopes the Fed would move at a later date.