Without fresh economic data to drive trading, dollar ticks lower after last week’s declines

Dollar ticks lower after last week’s big declines

NEW YORK — With no fresh economic data available in the U.S. Monday to point traders in any clear direction, the dollar mostly ticked lower in New York after last week’s big declines.

The expectation that the Federal Reserve will act further to bring down interest rates to support the economy is weighing on the dollar. Lower rates tend to drag on currencies.

Early on Friday, the U.S. currency had dived to a five-month low against the euro, hit a 2 1/2 year low against the Swiss franc and fallen to its weakest point versus the yen since the Bank of Japan intervened in currency markets the prior week.

While the euro notched a fresh five-month high versus the dollar at $1.3506 in European trading Monday, by late afternoon in New York the European currency was almost unchanged from late Friday. Worries about European government debt defaults are curbing the euro’s rise, said UBS analyst Geoffrey Yu.

The euro, used by 16 European countries, traded at $1.3475 late Monday from $1.3472 late Friday.

The British pound rose to $1.5855 from $1.5815, while the dollar fell to 84.24 Japanese yen from 84.39 yen.

The yen had jumped to 15-year highs against the U.S. dollar earlier this month, which led the government to intervene in foreign exchange markets to weaken the yen for the first time since 2004. The Japanese currency has risen strongly this year, particularly this past summer, because of its appeal as a safe-haven currency.

A stronger yen hurts profits of Japan’s major exporters, threatening to undermine the country’s recovery from the recession. On Monday, the Japanese government said the country’s export growth slowed for the sixth straight month in August because of the stronger yen and weaker demand for goods across the world.

“Intervention clearly remains a risk,” because the yen was likely to continue to attract buyers, wrote Credit Suisse foreign exchange analysts in a research note Monday. Japan may step in to currency markets again to keep the yen weak if the yen keeps gaining versus the dollar.

In other trading Monday, the dollar dipped to 1.0259 Canadian dollars from 1.0268 Canadian dollars, and edged lower to 0.9845 Swiss francs from 0.9855 Swiss francs.