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FOREX-Dollar on defensive, hits 1-month low vs yen

Published 16/08/2016, 02:30 pm
© Reuters.  FOREX-Dollar on defensive, hits 1-month low vs yen
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* Dollar/yen falls to lowest in more than a month

* Market awaits U.S. CPI, industrial output data

* Commodity currencies hold firm after oil's rise this week (Updates prices, adds comments)

By Masayuki Kitano

SINGAPORE, Aug 16 (Reuters) - The dollar hit a one-month low against the yen on Tuesday, staying on the defensive after recent U.S. economic data were seen likely to limit the prospects of a near-term Fed interest rate hike.

The dollar slid 0.8 percent to 100.43 yen and touched a low of 100.355 yen at one point, the greenback's lowest level against the yen in more than a month.

"It seems like there is a broad acceleration in dollar-selling momentum," said Teppei Ino, an analyst for Bank of Tokyo-Mitsubishi UFJ in Singapore.

The dollar's fall gained momentum when it breached its Aug. 2 low of 100.68 yen, Ino added.

Against a basket of six major currencies, the dollar fell 0.2 percent to 95.417 .DXY .

The euro edged up 0.1 percent to $1.1195 EUR= . Against the yen, the euro EURJPY=R slid 0.7 percent to 112.45 yen.

The greenback has retreated against the yen and the euro after weaker-than-expected July retail sales were seen likely to delay a Fed rate hike.

The markets will look to U.S. data later in the day including consumer prices, housing starts and industrial output for another chance to gauge the health of the economy. ECONUS

The dollar will probably fall further against the yen over the next few months, with the yen supported by factors such as Japan's rising current account surplus, said Heng Koon How, senior FX investment strategist for Credit Suisse (SIX:CSGN).

"Key risk to our view for more yen strength is of course more aggressive easing by the Bank of Japan when they next meet," said Heng, who expects the dollar to be trading at 96 yen three months from now.

"But so far this year, they have disappointed and failed to turn around sentiment," he added.

Commodity-linked currencies were supported by this week's rise in crude oil prices.

The Canadian dollar was at C$1.2914 per U.S. dollar CAD=D4 after touching a one-month high of C$1.2902 on Monday.

The Australian dollar inched up 0.1 percent to $0.7683 AUD=D4 after gaining 0.4 percent on Monday.

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