* Traders likely to sell dollar with US rates staying low
* Offers from Japanese exporters weigh on greenback
* High-yielders such as Aussie, kiwi resume rise vs dollar
By Rika Otsuka
TOKYO, Sept 24 (Reuters) - The dollar softened against
higher-yielding currencies on Thursday as investors shifted their
funds away from the greenback on expectations the Federal Reserve
will keep interest rate very low for a long time.
The dollar also edged down against the low-yielding yen after
it met strong resistance above 91.50 yen, hurt by offers from
Japanese exporters who have returned from a three-day holiday in
Japan.
But the dollar hovered well above a 1-year trough against the
euro as traders were careful about aggressively betting against
the U.S. currency after seeing Wednesday's sudden slide in U.S.
stocks <.SPX>.
Dealers were unsure what tipped shares lower, but it served
as an excuse to take profits on short positions and lifted the
dollar index <.DXY> to 76.370, from a 13-month trough of 75.827.
Analysts noted the Fed had reiterated its pledge to keep
interest rates at exceptional lows for an extended period at this
week's policy meeting, sounding less hawkish than some had
thought [].
"The Fed didn't make much of a change to factors surrounding
the dollar. That means the overall dollar trend stays downwards,"
said Jun Kato, senior chief analyst at Shinkin Central Bank
Research Institute.
Nine out of the 16 primary dealers in the Fed's 18-strong
exclusive network of primary dealers responding to a Reuters
poll said on Wednesday they expected the Fed to raise interest
rates in 2010, though none of the dealers polled expect a rate
rise before the second quarter of that year.
Five said the Fed would keep rates low until 2011 and two,
HSBC and BNP Paribas, said 2012. []
The dollar fell 0.6 percent on the day to 90.78 yen <JPY=>,
having slipped from the day's high of 91.63 yen on trading
platform EBS.
The dollar is seen trapped in a range around 91 yen in the
near-term as option barriers and bids from Japanese retail margin
traders are expected to provide support below 90.50 yen, traders
said.
The yen rose broadly, with the euro falling 0.7 percent
against the Japanese currency to 133.58 yen <EURJPY=R> and the
Australian dollar slipping 0.5 percent to 78.99 yen <AUDJPY=R>.
"Some short-term players are liquidating long positions in
cross/yen, and there may also be some selling by Japanese
exporters," said a trader for a Japanese brokerage house, adding
that moves were being exaggerated by thin market conditions.
The euro dipped 0.1 percent to $1.4716 <EUR=>, off a one-year
high of $1.4845 hit on trading platform EBS the previous day.
The European single currency is likely to see more
profit-taking after a brisk rally in the past few weeks that has
boosted the euro nearly 3 percent so far this month. But this is
expected to be a temporary correction.
With rates set to stay near zero for some time to come,
investors are likely to quickly return to funding carry trades in
dollars, sending it lower once more.
"We expect to see EUR/USD rise to at least $1.5000 by the end
of the year, and wouldn't rule out re-testing last year's highs
at some point," said analysts at TD Securities.
The New Zealand dollar rose 0.3 percent to $0.7196 <NZD=D4>,
crawling towards Wednesday's high of $0.7315, its strongest since
early August 2008. The kiwi jumped the previous day after data
showed the economy unexpectedly pulled out of recession in the
second quarter, fuelling expectations the central bank might have
to start raising interest rates sooner than previously thought.
The Australian dollar, another higher-yielding currency,
climbed 0.4 percent to $0.8704 <AUD=D4>, rising towards a
13-month high of $0.8790.
(Additional reporting by Wayne Cole in Sydney and Masayuki
Kitano in Tokyo; Editing by Joseph Radford)
