Dollar rangebound amid eurozone concern

TOKYO: The dollar was rangebound against other major currencies in Asia on Friday in lacklustre trade amid continuing uncertainty over the debt-hit eurozone economy, dealers said.

The euro fetched 1.3231 dollars in Tokyo morning trade, almost unchanged from New York late Thursday. It also stayed flat at 110.84 yen. The dollar was at 83.77 yen, marginally up from 83.70 yen.

The dollar fell overnight as the strong sale of 30-year US bonds led to lower yields. But the greenback will have support as banks and other institutional investors could unwind long positions in US Treasury bonds ahead of the holiday season, pushing up yields, dealers said.

The dollar may rise to 84.10 yen, said Satoshi Tate, a senior dealer at Mizuho Corporate Bank. "US bond-selling pressure remains in the market," he told Dow Jones Newswires.

The euro is under pressure as uncertainty over the eurozone economy and potential monetary tightening in China weigh on risk sentiment, dealers said. Concerns over Europe revived Thursday after credit agency Fitch slashed its ratings on Ireland.

Fitch downgraded Ireland by three notches, from A+ to BBB+, because of the deterioration in its public finances, despite plans for a massive international bailout package. Fitch said the outlook on the ratings was "stable," meaning there was unlikely to be any short-term change to them.

The current rating, which is investment grade, "is underpinned by the EU-IMF external support, as well as the Irish government's demonstrated commitment to fiscal consolidation and still strong underlying economic fundamentals."

Earlier this week, Ireland announced a draconian 2011 budget providing for 6.0 billion euros (8.0 billion dollars) in savings via tax hikes and spending cuts to go with a near 90-billion-euro bailout agreed with the European Union and International Monetary Fund. The government will put the EU-IMF bailout before parliament for a vote next Wednesday.