The US dollar fell across the board on Tuesday, touching a 15-year low below 83 yen as a break of technical support levels in several currency pairs sparked a stampede out of the greenback. With concerns growing about intervention by Japanese authorities to weaken the yen, the currency got a particular boost after Japan's prime minister won a leadership vote.
Prime Minister Naoto Kan won an unexpectedly decisive victory over party heavyweight Ichiro Ozawa, who had been more strident in his calls to intervene to weaken the yen. A rally by the euro to a one-month peak against the dollar also grabbed traders' attention after it broke out of its range of recent weeks to the upside amid market talk about possible further quantitative easing in a bid to stimulate the US economy.
Once the euro broke above the $1.2920 to 30 area, a level that had held since August, it kept going to a one-month high of $1.3033. It was last up 1 percent at 1.3007. The significant break came in late morning New York trade on market talk that Goldman Sachs said in a research note that while it suspects the Federal Reserve will ratchet down growth forecasts, the revision is unlikely to be enough to spark additional easing. The euro was up 0.3 percent at 108.07 yen.
The index is now oversold for the first time since August 6 based on the 14-day relative strength index. Amid broad US dollar woes, the Australian dollar surged to its highest against its US counterpart since mid-2008 after breaching an important technical level. It was last at $0.941, up 0.7 percent from late Monday. The move accelerated after the currency broke above a recent high around $0.9365.
The dollar fell to a 15-year low of 82.92 on electronic trading platform EBS and 82.93 on Reuters. It last traded at 83.10, down 0.7 percent on the day. The yen has gained more than 10 percent against the dollar this year as recent weak US data and record-low bond yields drove money away from US assets. Japan worries that a strong yen will hurt its export-driven economy.
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