11 August 2006, 13:54  US dollar firmer in Singapore afternoon trade on Japanese GDP figure

The US dollar was higher against the yen and euro in afternoon trading here, riding on morning gains due to the release of a weaker-than-expected headline figure for Japanese GDP in the April-June quarter, and amid concern about terrorism, dealers said. At 3.08 pm (0708 GMT) here, the dollar was at 115.75 yen, up from 115.49 yen in Tokyo about four hours earlier. The euro was at 1.2779 usd, up from 1.2772 usd in Tokyo. The dollar has benefitted from safe-haven buying since the UK authorities said yesterday they had foiled a plot to blow up airliners on international flights, dealers said. They said the dollar had also been given a boost early in the Asian session by Japan's GDP data, which show that the economy there grew by 0.2 pct quarter-on-quarter in the April-June quarter, having expanded by a revised 0.7 pct in the January-March quarter. The Bank of Japan's widely expected decision to keep the overnight call rate target unchanged at 0.25 pct and the release of the bank's monthly economic report failed to draw much of a response from the yen market, providing the dollar with more fuel to propel itself higher, dealers said. They said market players would pay attention to the latest US retail sales data, due to be released later today. US retail sales are expected to have risen by 0.8 pct last month, after a 0.1 pct drop in June, according to the results of a survey by Market News International. "We think any renewed signs of the US economy slowing, plus the focus on global imbalances, will cause the euro to trade towards 1.3000 usd over the next three months and ultimately to 1.3500 usd over the next 12 months," UBS said in a note to clients.

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