20.06.201304:45:18UTC+00Dollar bolster against Euro before U.S. housing report; Yen surge

The dollar boost for a second day against the euro before U.S. housing and manufacturing data that may add to the case for trimmed financial stimulus as flagged yesterday by the Federal Reserve.

Japanese Investments

A report from the Ministry of Finance in Tokyo today showed Japanese investors reduced their holdings of overseas debt for a fifth straight week, dumping 402.5 billion yen ($4.17 billion) of the securities in the period ended June 14.

Fed Outlook

“If the incoming data are broadly consistent with this forecast, the committee currently anticipates that it would be appropriate to moderate the pace of purchases later this year,” Bernanke said in a press conference in Washington. If later reports meet the Fed’s expectations, “we will continue to reduce the pace of purchases in measured steps through the first half of next year, ending purchases around mid-year.”

The Aussie dropped after HSBC Holdings Plc and Markit Economics said the preliminary reading of their Purchasing Managers’ Index for China’s manufacturing was at 48.3 in June. That compares with the 49.1 estimated by economists and below the 50 level that indicates expansion.

Australia’s currency slid 0.3 percent to 92.69 U.S. cents after touching 92.40, a level unseen since September 2010.