Dollar slips ahead of G7 meeting

AFP

Posted at Feb 13 2009 12:12 PM | Updated as of Feb 13 2009 08:12 PM

TOKYO - The dollar was weaker in Asia Friday ahead of a meeting of world finance chiefs to discuss growing fears about the health of the global economy.

The dollar fell to 90.72 yen in Tokyo morning trade from 90.94 in New York late Thursday. The euro gained to $1.2880 from $1.2861 but slipped to 116.85 yen from 116.95.

Finance ministers from the G7 economic powers are expected to discuss protectionism and the financial crisis at a meeting in Italy from Friday.

But UBS strategists said the event was unlikely to be a "landmark" event.

"We expect the yen to remain supported in the current risk averse environment," they wrote in a note.

Japan's Finance Minister Shoichi Nakagawa said Friday that he would not raise the issue of foreign exchange at the meeting.

"I will not bring that (the currency issue) up," he told reporters before leaving for Italy.

"I have told the United States and Europe that rapid fluctuations (in foreign exchange rates) are not desirable," he added.

Economic worries weighed on the dollar. US jobless claims remained high with 620,000 new filings in the past week, although there was better news on the consumer sector after retail sales jumped one percent last month.

US lawmakers were preparing for a final vote Friday on President Barack Obama's $789-billion plan to spur the economy back to health.

"Investors worried that Obama’s economic stimulus and bank rescue plans would not prevent a deep and prolonged US recession," wrote NAB Capital strategist John Kyriakopoulos in a note.

"Reports of accelerating foreclosures and falling home prices no doubt encouraged these concerns," he added.