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by ForexNewsNow Team on October 19, 2010

USD/JPY rises after Geithner speech; U.S. building permits eyed

indicator analysis - U.S. building permitsNEW YORK (Forex News Now) – The U.S. dollar bounced against the yen on Tuesday, after Treasury Secretary Tim Geithner denied the U.S. was deliberately weakening the dollar to prop up its economy.

In early European currency market trading, USD/JPY hit 81.38, up 0.13 percent on the day.

Geithner made the comments on Monday, amid rising tensions over Chinese and U.S. currency valuations.

“It is very important for people to understand that the United States of America and no country around the world can devalue its way to prosperity and competitiveness,” the treasury secretary said at a meeting in California.

“It is not a viable, feasible strategy and we will not engage in it.”

According to intraday analysis, USD/JPY was likely to touch immediate support around 80.88, Friday’s 15-year low, and encounter resistance around the high of Oct. 7, 83.03.

The dollar’s gains also came ahead of key reports on U.S. building permits and housing starts. The U.S. Federal Reserve chairman, Ben Bernanke, was also due to speak later in the day at a public engagement in Fairfax, where FX traders were likely to scrutinize his comments for clues to future shifts in monetary policy.

Elsewhere, the yen slid slightly versus the euro: EUR/JPY traded at 113.29, up 0.04 percent, according to intraday analysis.

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