Dollar gains in Asia trade

December 28, 2009
Shares

, TOKYO, Dec 28 – The dollar rose in Asian trade on Monday, supported by optimism about the outlook for the US economy, dealers said.

The dollar gained to 91.57 yen in Tokyo afternoon trade from 91.47 in late Asian trade on Friday, when markets in New York and London were closed for the Christmas holiday.

The euro slipped to 1.4382 dollars from 1.4385 but edged up to 131.70 yen from 131.45.

The dollar\’s strength reflected investors\’ expectations that the United States will recover from recession more quickly than other major economies, said Marito Ueda, a currency trader at FX Prime.

US data issued last week showed that orders for manufactured durable goods rose in November, while weekly claims for jobless benefits dropped to the lowest level since September 2008.

Markets were looking ahead to the next batch of US indicators due this week, including the Conference Board\’s consumer confidence index and housing prices, analysts said.

"Both data should be consistent with a gradual recovery remaining on track," predicted Calyon economist Sebastien Barbe.

But markets may be getting ahead of themselves in betting on early interest rate hikes by the US Federal Reserve, he added.

"The Fed will not raise rates soon. In addition, fiscal worries are also very much present in the US. In our view, those fears should limit the dollar\’s upside at some point," Barbe said.

The yen failed to get much of a boost from the latest economic data out of Japan. Markets were also unmoved by news that Finance Minister Hirohisa Fujii, 77, was hospitalised for tests due to high blood pressure and fatigue.

Factory output rose for a ninth straight month in November, extending the longest unbroken expansion since 1997 on the back of a recovery in exports, but retail sales remained weak, the government said.

"It\’s hard to buy the yen at the moment due to uncertainty over the political and economic outlook," Ueda said.

Recent voter surveys have shown a sharp drop in support for Prime Minister Yukio Hatoyama, who is embroiled in a political funding scandal.

Against Asian currencies, the dollar fell to 1.4063 Singapore dollars from 1.4064 on Friday, to 1,169.80 South Korean won from 1,174.60, and to 46.40 Philippine pesos from 46.51.

The greenback firmed to 9,490 Indonesian rupiah from 9,480, while holding steady at 32.25 Taiwan dollars and at 33.38 Thai baht.

Shares

Latest Articles

Stock Market

Most Viewed