SINGAPORE/TOKYO, May 22 (Reuters) - The dollar edged lower
versus a basket of major currencies on Friday in the wake of
unimpressive U.S. economic data, with investors awaiting
speeches by major central bankers.
The dollar index slipped 0.2 percent to 95.117,
having backed off from Wednesday's peak of 95.837, its highest
level since May 5.
It is still up 2 percent on the week, putting it on track
for its first weekly gain in six weeks.
Analysts said the index's inability to break above its
100-day moving average, currently around 95.620, was keeping a
lid on the dollar.
Against the yen, the dollar sagged slightly after the Bank
of Japan maintained its massive monetary stimulus, as expected,
and slightly revised up its assessment of the economy,
signalling that it sees no need to expand stimulus again on the
near-term horizon.
The reaction was subdued, however, with the dollar last down
0.2 percent on the day at 120.82 yen, compared to around
120.90/95 just ahead of the BOJ announcement.
For the week, the dollar is up more than 1 percent against
the yen, having touched a two-month high of 121.49 yen on
Wednesday.
The dollar's rise this week was probably helped by technical
factors and the fact that the greenback had been well supported
in recent weeks at the 118-yen levels, said a trader for a
Japanese bank in Tokyo.
"I think there is a sense that it might be better to buy
(the dollar) since the downside was solidly supported and it
looks as it is starting to break higher on charts," he said.
"But it's not as if an immediate rise to 125 yen seems
likely," he said, adding that market participants were looking
for a clearer catalyst.
The next focus for the yen is BOJ Governor Haruhiko Kuroda's
post-meeting news conference.
Later on, investors will turn their attention to a speech by
European Central Bank President Mario Draghi, who along with a
other central bankers will be addressing an ECB Forum on
"Inflation and Unemployment in Europe."
Focus will also fall on Federal Reserve Chair Janet Yellen.
who is due to speak on the U.S. economic outlook before the
Greater Providence Chamber of Commerce Economic Outlook Luncheon
at 1700 GMT.
Traders said those event risks, coupled with holidays on
Monday, called for caution.
UK and U.S. markets are shut on Monday for the Spring Bank
Holiday and Memorial Day respectively. European centres such as
Germany will be observing the Whit Monday holiday.
Going into the weekend, the dollar was pegged back after
disappointing U.S. data on Thursday.
Home resales fell in April and the strong dollar pressured
manufacturing activity in May, although the labour market
continued to tighten and the U.S. economy apparently remained on
a modest growth track.
The euro rose 0.3 percent to $1.1150, staying above
Wednesday's three-week low of $1.1062.
Sterling inched up 0.1 percent to $1.5677. The
pound had gained 0.8 percent on Thursday after data showed
British retail sales rose more strongly than expected in April.
Against the yen, sterling eased 0.1 percent to 189.34 yen
, having touched a high of 190.03 yen on Thursday, the
pound's strongest level against the yen since September 2008.
"The (recent) stagnation of dollar/yen has hidden an
underlying weak yen trend," said Callum Henderson, global head
of FX research for Standard Chartered Bank in Singapore, noting
that the yen had come under renewed pressure in the past few
weeks.
* Dollar index hovers below recent 2-week high
* For the week, dollar index up more than 2 pct* BOJ keeps policy unchanged as expected
* Caution reigns ahead of Kuroda, Yellen comments (Updates prices, adds comments)
By Masayuki Kitano and Lisa Twaronite
(Editing by Simon Cameron-Moore)
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