Dollar down in Asia as risk appetite grows

March 31, 2011 | 10:27

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The US dollar slid against the euro in Asia Thursday as investors abandoned the safe-haven for riskier assets following a rally in US bourses, analysts said.

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The euro bought $1.4144 in early Asian trade compared to $1.4129 in late New York Wednesday. The greenback traded at 82.90 yen from 82.88 a day ago.

The European currency changed hands at 117.25 yen from 116.81 on Wednesday.

Traders were dumping the US dollar as they branched out into riskier investments following a rally in US equities on Wednesday, US-based DailyFX said in a report.

"The US dollar fell against all major currencies except the similarly-downtrodden Japanese yen, sinking on impressive gains in the Dow Jones Industrial Average and broader 'risk,'" the forex research firm said.

The greenback is regarded as a safe haven currency by investors, therefore its value will retreat when risk sentiment become bullish as traders seek riskier and more profitable assets.

Traders' appetite for risk was stoked by Wednesday's US equities markets rally fuelled by stellar growth in private-sector hiring, which suggested the ailing labour market had turned a corner.

The Dow Jones Industrial Average rose 71.60 points (0.58 per cent) to finish at 12,350.61 and the broad-based S&P 500 index advanced 8.82 points (0.67 per cent) to 1,328.26.

Payrolls firm ADP reported that US companies added 201,000 jobs in March, stoking hopes for the government's keenly awaited March jobs data due Friday.

AFP

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