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Forex outlook:
The dollar traded near the highest against the yen in more than four months as strong data on the jobs and manufacturing sectors was released Friday. The U.S. dollar may extend six weeks of gains as traders scale back bets the Federal Reserve will lower interest rates.``U.S. economic indicators look strong and there's nothing but to buy the dollar,'' said Yuji Saito, head of the foreign- exchange sales department at Societe Generale SA in Tokyo. ``With expectations of a rate cut dwindling, the dollar will head higher.'' The dollar traded at 121.99 yen as of 2 p.m. in Tokyo from 122.10 in New York on June 1, when it reached 122.14, the highest since Jan. 29. It traded at $1.3451 per euro, from $1.3449.
The Euro is expected to hold is levels against the majors on expectation that the ECB will raise the interest rate later in the we. ``The euro remains firm on prospects of further rate increases,'' Masaki Fukui, a senior economist and currency analyst at Mizuho Corporate Bank Ltd. in Tokyo, said in an interview today. ``I expect the ECB to raise rates three more times, including this week.'' Europe's single currency may advance to a record 173 yen this year as a strengthening economy and rising rates attract investment into the region's assets, Fukui said. The euro was at 164.11 yen from 164.16. It touched an all- time high of 164.29 yen on May 29. the interest rate futures signals that the investors placed bets that the ECB will raise the rates to 4.5%.
Gold fell in Asia as some investors bet last week's rise, its biggest weekly gain in more than three months, was overdone.Gold last week closed above $670 an ounce for the first time since May 15 after the European Central Bank said it won't sell any more gold until after Sept. 26. This helped to boost demand for the precious metal, which rose 2.4 percent in its biggest weekly gain since the week ending Feb. 9. ``A bit of profit-taking as expected is sending it lower this morning,'' Jonathan Barratt, managing director of Commodity Broking Services in Sydney, said today by phone. ``Even if it comes back to $666 an ounce the market will still view that as quite positive.'' Gold futures for August delivery fell as much as $2.70, or 0.4 percent, to $674.20 an ounce and traded at $675.40 at 4:03 p.m. Sydney time in electronic trading on the Comex division of the New York Mercantile Exchange.
Crude Oil: The black gold fell in New York, snapping three days of gains, on speculation that U.S. stockpiles are sufficient to meet the needs of refineries making gasoline for the peak summer demand. ``Operating rates are going up and that's relieving some of the concerns about a shortage of gasoline supply,'' said Ken Hasegawa, a manager of the international division at commodity futures broker Himawari CX Inc. in Tokyo. ``News that Nigeria's main rebel group will stop attacks for a month is also bearish for oil.'' Crude oil for July delivery dropped as much as 52 cents, or 0.8 percent, to $64.56 a barrel in after-hours electronic trading on the New York Mercantile Exchange
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