Dollar edges up against euro, yen

LONDON: The dollar rose on Monday in subdued trade on holidays in Tokyo and New York, as comments from the US Federal Reserve alleviated selling pressure, analysts said.

In late morning trading here, the European single currency fell to 1.4713 dollars from 1.4727 dollars late in New York on Friday.

Against the Japanese currency, the dollar advanced to 90.32 yen from 89.32 yen on Friday.

"With Tokyo closed overnight and the United States on holiday, it is likely to be a quiet start to the week," said Barclays Capital analyst Moyeen Islam.

"The focus for investors is likely to be the commencement of the third-quarter earnings season."

Islam added: "Overall, a strong earnings season should improved market sentiment and risk tolerance and support market confidence going forward."

The dollar found some support after Federal Reserve chairman Ben Bernanke's comments last week that US interest rates could be on the rise. A hike in interest rates would make the dollar more attractive to investors.

Despite the dollar's recent rise, dealers do not expect the greenback to climb much higher as equities continue to reflect a good start to the earnings season, analysts from Societe Generale said in a report.

"We also expect further gains in most Asian currencies, though as has developed during the last few weeks, we expect (the) best gains may come against a basket of G7 currencies, rather than just against the US dollar," they said.

The US currency had come under pressure recently from speculation that the United States would be slower to tighten monetary policy than other central banks.

That interpretation had encouraged investors to shun the dollar in favour of the euro.

However, Bernanke on Thursday indicated that interest rates in the United States would need to be raised when the "economic outlook has improved sufficiently."

The Fed cut interest rates to virtually zero percent last December to help jolt the economy out of its worst recession in decades.

In London on Monday, the euro was changing hands at 1.4713 dollars against 1.4727 dollars late on Friday, at 132.86 yen (132.86), 0.9338 pounds (0.9292) and 1.5199 Swiss francs (1.5191).

The dollar stood at 90.32 yen (89.77) and 1.0331 Swiss francs (1.0311).

The pound was at 1.5755 dollars (1.5839).

On the London Bullion Market, the price of gold edged up to 1,052.32 dollars an ounce from 1,051.50 dollars an ounce late on Friday.