TOKYO (AFX-ASIA) - Major currencies were little changed in midafternoon trade, with no fresh leads ahead of the US second quarter to GDP results tomorrow, as well as the outcome of the upper house election on Sunday, dealers said.
A dealer at a local Japanese bank said it is possible that the US will likely shift its strong-dollar policy amid deteriorating earnings results among US firms.
"As the strong dollar is damaging earnings, I expect US firms to start criticising the strong-dollar policy," he said.
"It is necessary to prepare for a possible dollar fall against the yen," he said, adding that the dollar/yen will move in the range of 123.00-124.00 in the short-term.
The dealer said the dollar may fall slightly against the yen if US second quarter GDP comes in weak, dragged down by euro/dollar cross trading.
"But considering the current economic situation in Japan, investors cannot buy the yen against the dollar either," he said.
The dealer said that, currently, the euro has the most potential to rise, adding that the European unit will gradually rise against the dollar following an expected rate cut by the European Central Bank. "Recent German PPI and CPI data is stabilising. If there is more data which confirms an inflation slowdown in Europe, it makes it much easier for the ECB to decide to cut its rate to support the economy," the dealer said.
He said he expects the euro will move in the range of 0.8700-0.8950 in the short-term, adding that it is possible the euro will rise to 0.9000 in a couple of weeks.