TOKYO - The dollar firmed to a one-week high against the euro on Thursday, supported by a rise in U.S. stock futures, but selling by Japanese exporters as well as profit-takers blocked it from gaining against the yen. Traders said the market was cutting long euro positions against the yen after the single currency failed to maintain a three-year peak of 123.05 yen reached on Tuesday.
The fall in the euro/yen was also pressuring the euro against the dollar, they said. "The market's movement today is very complex and it looks as if it's being moved by various position adjustments rather than news," said Noriyuki Kato, head of foreign exchange at ING in Tokyo.
In a similar reaction to the weekend bombing in Bali that killed close to 200 people, the market was little moved by two explosions in the southern Philippines that left three dead.
As of 0605 GMT, the euro was at 97.79 cents, its lowest since October 8, from 98.10 in late New York trade. The single currency fell to 121.59 yen from 122.04. The dollar was at 124.33 yen, compared with 124.47 in late U.S. trade.
Dealers said sales were heavy above 124.75 to 125 yen. That level is roughly the middle mark between this year's high above 135 and low around 115 yen and has been seen as a target for taking profits.
But traders said the dollar's fall against the yen could be temporary. "The market is in an adjustment phase after hitting 125 yen. I think if the dollar stays above 124 yen this week, we could see a further rise to around 126 or 127 yen," said ING's Kato. The greenback rose briefly to a four-month high of 125.05 on Wednesday. //www.money.iwon.com