* Dollar seen staying under pressure on Fed stimulus
* Some analysts continue to favour commodity currencies
* Yen under pressure on talk of intervention, BOJ easing
By Ian Chua
SYDNEY, Sept 17 The dollar languished near a
seven-month trough versus a basket of major currencies in Asia
on Monday, but recovered some ground against a broadly weaker
yen, which faces a central bank that could ease monetary policy
The dollar index stood at 78.878, having fallen as
far as 78.601 on Friday, a level not seen since late February.
It has shed some 6 percent from a 24-month high of 84.100 in
"Investors are likely to continue adding bearish dollar
positions. In addition, risky assets including commodities and
equities will remain well supported given that the "Bernanke
put" is firmly in place," analysts at BNP Paribas wrote in a
They said a slew of Fed speakers this week will likely
defend the Fed's new stimulus programme, which could see the
bank buy a total of $600 billion of bonds, according to the
median forecasts of a Reuters poll.
"With the USD bearish tone gaining momentum, high beta and
commodity currencies will be most attractive," BNP analysts
The euro fetched $1.3116, near a four-month peak of
$1.3169 set Friday. It has soared nearly 10 percent from a
25-month trough around $1.2042 plumbed in July.
The dramatic bounce in the single currency also reflected
relief after the European Central Bank recently announced a
long-awaited plan to help lower painfully high borrowing costs
for stressed members. Markets are now waiting to see if Spain
will ask for help to tackle its debt pile.
Analysts said Madrid appeared to be paving the way for
requesting such assistance after it said it would set clear
deadlines for structural reforms by month-end.
The greenback, however, recovered most of its recent losses
against the yen, rising back to 78.34 from a seven-month
trough of 77.13 plumbed on Thursday.
Worried that a strengthening yen could hurt an already
struggling export-reliant economy, Japanese authorities last
week threatened to intervene to weaken the currency.
The Bank of Japan may also be forced to ease monetary policy
at its meeting on Wednesday to counter the Federal Reserve's
latest stimulus measures.
The yen fell to a four-month low against the euro, which
bought 102.94, while the Australian dollar reached a
three-week high of 83.08.
Against the greenback, the Aussie stood at $1.0536,
having scaled a six-month peak of $1.0625 after breaking above
its August high of $1.0615.
"Overall, the Australian dollar is likely to remain strong
but it's hard to see it rising above last year's high of $1.10.
A more likely outcome is a range of $0.95 to $1.10," said Shane
Oliver, head of investment strategy at AMP Capital.