By James Glynn
SYDNEY--The U.S. dollar fell in Asia-Pacific trading Monday as nervousness grew among investors following U.S. President Donald Trump's order to tighten immigration rules and data showing the U.S. economy slowing at the end of 2016.
Currency traders pushed the U.S. dollar down against the yen and the euro in trading thinned by the Lunar New Year holidays in Asia.
The U.S. dollar slipped against the Japanese currency from a weekend high of Y115.38 to as low as Y114.27. Meanwhile, the euro rose from around $1.0697 at the weekend to $1.0733. The WSJ Dollar Index, a measure of the dollar against a basket of 16 currencies, was down 0.33% at 91.12. TheAustralian dollar was little changed through the morning session at US$0.7555.
The world's largest economy expanded at an annual rate of 1.9% in the fourth quarter, marking a slowdown for the U.S. from its third-quarter 3.5% growth spurt, the Commerce Department said Friday.
While the dollar recovered some firmness after fluctuating immediately after the release of the data on Friday, the weaker-than-expected figure offered a cue for some traders in Asia to cash in profits on Monday.
Other dealers cited the disruption and protests following U.S. President Donald Trump's decision Friday to sign an executive order temporarily barring some immigrants and refugees from entering the U.S.
The move stoked unease among market players already feeling nervous about the rising threat of trade tensions.
Senior Trump administration officials said the ban was necessary to keep out possible terrorists while tougher screening and vetting procedures are enacted. The order also bans Syrian refugees from entering the U.S.
The move attracted criticism from within Trump's own Republican Party, while international reaction included opposition from Chancellor Angela Merkel and U.K. Prime Minister Theresa May.
"I think it's fair to say we have a mild risk-off response to Trump's Friday night executive actions," said Ray Attrill, global head of currency strategy at National Australia Bank.
"This is bound to reverberate with a risk of tit-for-tat responses that might result in a ban on U.S. citizens traveling to those countries most affected. These actions do have the potential to undermine global risk sentiment," Mr. Attrill added.
"The orders are coming thick and fast as Trump tries to cement his credentials as a man of action," ANZ Bank said in a note to markets. The new immigration measures "will undoubtedly rattle nerves," ANZ added.
Currency markets might also grow impatientwith the new U.S. administration if it is slow to provide more detail around its plans for economic stimulus, tax cuts and infrastructure cuts, traders said.
Dollar bulls look a little unsettled by the immigration order, given condemnation from European officials and from many U.S. business leaders, said Sean Callow, senior currency strategist at Westpac.
Still, some strength is likely to return to the U.S. dollar midweek with an upbeat assessment of the U.S. economic outlook likely to be issued by the U.S. Federal Reserve.
"The FOMC meeting is sure to have a hawkish tone to it, reflective of recent stronger U.S. economic data and President Trump's coming fiscal stimulus," said Richard Grace, global head of currency strategy at the Commonwealth Bank of Australia.
The more likely risk is still for more U.S. interest rate increases this year than the market is currently anticipating, Mr. Grace added.
Interbank Foreign Exchange RatesAt 21:50 EST / 0250 GMT
Latest Previous %Chg Daily Daily %Chg
Dollar Rates Close High Low 12/31
USD/JPY Japan 114.36-37 115.13-14 -0.67 115.13 114.36 -2.26
EUR/USD Euro 1.0733-36 1.0697-700 +0.34 1.0742 1.0699 +2.04
GBP/USD U.K. 1.2587-89 1.2548-50 +0.31 1.2601 1.2549 +1.97
USD/CHF Switzerland 0.9964-68 0.9990-94 -0.26 0.9992 0.9961 -2.19
USD/CAD Canada 1.3125-30 1.3150-55 -0.19 1.3153 1.3126 -2.34
AUD/USD Australia 0.7553-57 0.7546-50 +0.09 0.7561 0.7548 +4.90
NZD/USD New Zealand 0.7271-77 0.7261-67 +0.14 0.7277 0.7264 +5.04
EUR/JPY Japan 122.75-79 123.11-15 -0.29 123.13 122.76 -0.27
Source: Tullett Prebon
--Hiroyuki Kachi contributed to this article.
Write to James Glynn at firstname.lastname@example.org
(END) Dow Jones Newswires
January 29, 2017 22:59 ET (03:59 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.