Greenback Steadies Near 13-Year Low Versus Yen

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The dollar held its ground versus its major counterparts on Monday, recovering from an 8-month low versus the yen. While there were little first-tier economic data from the US to consider, traders positioned themselves ahead of this week's pivotal monthly jobs report.

It has been a brutal few months for the dollar versus most majors. While higher-yielding currencies like the euro have been supported by rising stocks and risk appetite, those looking for a safe haven have preferred the yen to the dollar due to concerns about the long-term impact of massive government spending measures.

On Monday, the dollar found support against the yen after plunging toward a 13-year low. The dollar fell as far as 88.21, its lowest level since January, but snapped back to 89.70 by mid-day. A move below 87.08 would take the dollar to its lowest since 1995.

Meanwhile, the dollar firmed up a bit versus the euro, staying near 1.4600. With the advance, the buck pulled away from last week's yearly low of 1.4866.

Against the slumping sterling, the dollar remained within a cent of a 4-month high of 1.5769.

UK faces a greater threat from inflation than any other developed country, the Financial Times said in a report on Monday citing market rates. The report noted that the Bank of England's GBP 175 billion purchase of government bonds, among others, is likely to drive up prices in the long term, higher than in the U.S, continental Europe, or Japan.

The San Francisco Federal Reserve released an economic letter Monday, saying that creating an early-warning system that would predict the timing of potential world financial crises would be a daunting task because of the different factors that contribute to such problems in different countries.

"If the causes of the crises differ across countries, there is little hope of finding a common statistical model to predict them," wrote San Francisco Fed researchers Andrew Rose and Mark Spiegel.

On Tuesday, the S&P/Case-Shiller home price index, which tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S., is scheduled to be released at 9 AM. Economists expect a 14.20% year-over-year decline in the 20-city composite house price index for July.

(Market News Provided by RTTNews)