WebProNews

The dollar has reached the lowest it has been in five years against the yen, while the Euro remains steady against the dollar.

"The dollar will remain on the defensive over the next 24 hours," said Dresdner Kleinwort Wasserstein currency stategist, Kamal Sharma. "People's focus is still on the deficit issues and they will be nervous before the number."

"The appreciation of the yen was matched by appreciation of most Asian currencies against the dollar as speculation that greater international pressure will result in China adopting a more flexible exchange rate regime possibly around the time of the G7 meeting," says Derek Halpenny at Bank of Tokyo Mitsubishi.

Japan's finance minister, Sadakazu Tanigaki, warned that authorities were ready to take action if exchange rates didn't reflect market fundamentals.

"As the G7 statements have been saying, currency rates should reflect fundamentals. If movements deviate from fundamentals we will act appropriately," said Tanigaki.

"I'd expect to see an intensification of the rhetoric from European and U.S. officials that Asia needs to step up to the plate and revalue its currencies," says Monica Fan, head of global currency strategy in London at RBC Capital Markets.

WebProNews | Breaking eBusiness News
Your source for investigative ebusiness reporting and breaking news.