Dollar holds steady in Asia on economic data

Posted at 08/20/12 2:01 PM

TOKYO - The dollar held steady in Asian trade on Monday after positive economic data last week boosted optimism about the world's largest economy, and cut the chances of further monetary easing.

The greenback bought 79.47 yen in Tokyo afternoon trade against 79.55 yen in New York late Friday, while the euro was worth $1.2328, slightly down from $1.2330 in US trade. The euro eased to 97.98 yen from 98.10 yen.

The common European currency's decline came amid dollar buying on the heels of US economic reports including a new survey released Friday that showed consumers were a little more upbeat than in July.

"The euro/dollar is top-heavy as the dollar is bought," Junichi Ishikawa, forex analyst at IG Market Securities in Tokyo, told Dow Jones Newswires.

The data reduced the likelihood of further monetary easing by the US Federal Reserve, which would generally weaken the currency.

Traders would turn their focus to Wednesday's release of the minutes from the most recent meeting of the Fed's Open Market Committee, dealers said.

The euro, meanwhile, was supported by expectations that the European Central Bank would purchase struggling eurozone countries' sovereign debt following a report in the Germany newsweekly Der Spiegel, Ishikawa said.

The report Sunday said that the ECB was considering buying the bonds of crisis-wracked eurozone countries to help contain their borrowing costs.

The bank would set an upper limit for borrowing costs in countries such as Spain and Italy and intervene in the markets if necessary to ensure the limits were not breached, the report said, without citing its sources.

The dollar was mostly higher against other Asia-Pacific currencies.

It rose to 42.40 Philippine pesos from 42.31 pesos on Friday, to 9,517 Indonesian rupiah from 9,500 rupiah, and to 31.52 Thai baht from 31.50 baht.

The greenback rose to 1,135.45 South Korean won from 1,134.40 won and to Sg$1.2531 from Sg$1.2520 and to Tw$30.00 from Tw$29.99, while slipping to 55.68 Indian rupees from 55.74 rupees.

The Australian dollar changed hands at $1.0455 from $1.046 while the Chinese yuan was unchanged at 12.46 yen.

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