Reply #17: Bears Claw Dollar, Yen Up on Japan Vote [View All]

[UpInArms]

http://www.reuters.com/financeNewsArticle.jhtml?type=businessNews&storyID=5645213

NEW YORK (Reuters) - The dollar traded in narrow ranges on Monday, with sentiment bearish ahead of a heavy U.S. economic data slate this week, while the yen pared its gains made earlier in the global session.

The Japanese currency got a boost after Japan's ruling Liberal Democratic Party (LDP) appeared to weather weekend elections just well enough to shore up expectations for prime minister Junichiro Koizumi's economic reform efforts.

The yen initially hit a two-week high against the dollar and a one-week peak versus the euro reflecting views among traders that over the long term Koizumi's pro-reform stance could benefit the Japanese economy and, by extension, the yen.

The dollar slid briefly to a four-month low against the euro and a five-month low against the Swiss franc, extending last week's losses as the market continued to tone down expectations for anything more than a gradualist approach to interest rate hikes from the U.S. Federal Reserve.

"We have had this lingering bearishness hanging over the dollar since the (June) U.S. employment report, and we have not had any sort of news to counteract that (since)," said John Beerling, regional foreign exchange trading desk manager for Wells Fargo in Minneapolis.

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In the United States, currency traders are fixing their sights on a full U.S. economic data calendar this week, featuring reports on jobless claims, the trade balance, net capital inflows, producer prices and consumer prices. Other reports on retail sales, industrial production and consumer sentiment also will command attention.

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