American focus: dollar steady despite weak data.[M]
The dollar fell against the yen as reports showed U.S. construction of
single-family homes dropped to a 26-year low and consumer confidence
declined, increasing concern the world's largest economy is headed for
a recession.
The yen appreciated versus the euro, the Australian dollar and the
Norwegian krone as a slide in U.S. stocks encouraged investors to sell
higher-yielding assets and pay back low-cost loans in Japan's currency.
South Korea's won rebounded, following yesterday's biggest drop in a
decade, on speculation the government will prop up confidence in
financial markets.
``If you look at the state of the economy and corporate America, we are
going to be in a fairly tough situation for quite some time,'' said
Fabian Eliasson, vice president of currency sales at Mizuho Corporate
Bank Ltd. in New York. ``The dollar will be under pressure mainly
against the yen. The yen will be the strongest currency going
forward.''
``The yen is still the safe-haven currency,'' said Win Thin, a senior
currency strategist at Brown Brothers Harriman & Co. in New York.
``The currency market is dictated by the general tone in stocks.''
Construction of single-family homes dropped 12 percent to a 544,000
annual rate, the Commerce Department said in Washington. Starts on all
residential properties, including condominiums, slid to 817,000, below
the median forecast of 74 economists surveyed by Bloomberg News.
The Standard & Poor's 500 Index fell 0.1 percent on the housing data after a 4.2 percent rally yesterday.
The Reuters/University of Michigan preliminary estimate of October
consumer sentiment fell to 57.5 this month from 70.3 at the end of
September. The median forecast of 61 economists surveyed by Bloomberg
News was for a drop to 65.
For the week, the yen fell against the euro for the first time since
the period ended Sept. 19, dropping 0.7 percent. It declined 0.4
percent against the dollar after four weeks of gains. The dollar was
little changed versus the euro this week.
