LONDON - The dollar stepped back from a four-month peak against the yen and a one-month peak against the euro on Monday as U.S. stock futures tempered hopes of further Wall Street gains. The yen drew additional support from a decision by rating agency Moody's Investors Service to raise Japan's foreign currency debt ceiling to its top notch.
U.S. stocks have staged a dramatic recovery from recent five-year lows, brightening the appeal of U.S. assets and easing fears over the United States' ability to fund its current account deficit. But U.S. stock futures were pointing to a lacklustre opening on Monday with investors keen to cash in recent gains. "The dollar got support from a strong rally in equities last week but it is difficult seeing this being sustained," said Michael Klawitter, senior currency strategist at WestLB.
The focus remains on stocks and we look set for a day of consolidation." The dollar stood at 124.60 yen in mid-morning European trade, down more than a yen from earlier four-month peaks.
News that Irish voters approved the European Union's Nice Treaty in a weekend referendum had little impact on the euro which gained a third of a percent against a retreating dollar to $0.9760 but dipped to 121.60 against a broadly-firmer yen.//www.money.iwon.com