TOKYO (MarketWatch) -- The dollar slipped Monday, a day after China's chief banking regulator criticized loose U.S. monetary policy as leading to increased speculation.
"The continuous depreciation in the dollar, and the U.S. government's indication that, in order to resume growth and maintain public confidence, it basically won't raise interest rates for the coming 12 to 18 months, has led to massive dollar arbitrage speculation," Liu Mingkang, chairman of the China Banking Regulatory Commission, said Sunday in Beijing at the International Finance Forum, according to news reports.
Low U.S. interest rates and a weaker greenback have "seriously affected global asset prices, fuelled speculation in stock and property markets, and created new, real and insurmountable risks to the recovery of the global economy, especially emerging-market economies," Liu said.
The dollar bought 89.45 yen, down from 89.72 yen in late North American trading on Friday. The euro bought $1.4956, up from $1.4903 late Friday.
China has kept its tightly controlled currency, the yuan, almost unchanged against the U.S. dollar for more than a year, in a move that gives Chinese exports a competitive advantage in U.S. markets.
Last week, China's central bank made a rare change of wording on its exchange-rate policy that was seen as a hint Beijing may let the yuan appreciate.
The People's Bank of China said in its quarterly policy report released Wednesday that it will consider "changes in international capital flows and the trends of major currencies" in managing the exchange rate. Read more on People's Bank of China currency statement.
U.S. President Barack Obama is on his first official visit to China this week to discuss a range of contentious issues, but is unlikely to push China too hard on currencies or anything else.
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