The dollar was slightly easier in afternoon trade ahead of the announcement due later today by the government of its bank bad debt disposal plans and an accompanying anti-deflation package, dealers said. They said investors are basically marking time ahead of the news, while also waiting to see what action, if any, the Bank of Japan may take at its ongoing policy board meeting.
Additionally, following the sharp drop in US consumer sentiment data overnight, which hit the dollar badly, the market wants to see how the rest of the US figures come in over the week to get a better idea of just how serious the problems in the US are getting. Kazuhiro Kaneko, a dealer at Trust and Custody Service Bank, said the dollar is basically rangebound for the moment.
"Players are taking a wait-and-see attitude. They are waiting for the leads to come out - the BoJ, the anti-deflation package tonight and US (data). Until those are released, it is difficult to make any new move," Kaneko said. In terms of the BoJ policy board meeting, he said "the market is expecting some sort of easing ... but I am not sure about the impact of any BoJ decision on the forex market."
"The dollar has come back up since last night but how much more could it rise from here? We just have to see what the BoJ will say." //www.ananova.com