The dollar remained soft in late trade, struggling in all its major crosses in late deals as the yen kept most of its gains in the wake of the weekend's G7 meeting. The weekend's G7 meeting in Dubai ended in an endorsement of US Treasury Secretary John Snow's call for more flexibility in exchange rates, paving the way for players to bid the yen higher. Although Snow has since denied that there has been any change in the strong dollar policy, the euro capitalised on greenback weakness today, hitting USD1.1477. Against sterling, the euro was up at STG0.6962.
According to most dealers, the Japanese will now be expected to intervene to smoothe out the yen's spike. Earlier, the yen hit a 33 month high against the dollar at 111.38. The statement from the G7 meeting has been interpreted as providing greater potential for Asian currencies to strengthen, said analysts. Sterling also moved up on the dollar. The recent run of positive UK data and expectations that the UK will be first to hike interest rates provide some justification for the pound's resilience, dealers said. //www.fxcentre.com