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Dollar firms in Asia on Fed phase-out mood

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(Globalpost/GlobalPost)

The dollar firmed in Asian trade Tuesday on expectations the US Federal Reserve will begin to phase out its monetary easing this year, dealers said.

A better-than-forecast inflation reading also soothed concerns over a slowdown in China, providing further support to the greenback, dealers said.

The US currency stood at 101.13 yen in afternoon Tokyo trade, up from the 100.99 yen in New York late Monday.

The euro bought to $1.2861, compared with $1.2868, while it also fetched 130.09 yen from 129.96 yen.

Figures showing the United States put on more jobs in June than expected added to a slew of data pointing to continuing strength in the economy, raising the prospect the Fed will start its stimulus wind-down soon.

The central bank's $85 billion-a-month bond-buying scheme has been credited with fuelling a rally in global markets.

Forex traders will now look to Tokyo on Thursday, when Japanese central bank chief Haruhiko Kuroda will give a news conference after a policy-setting meeting.

While the Bank of Japan is not expected to unveil any measures on top of its own vast asset-purchasing drive, Kuroda's comments will be picked over for clues about his next move to kickstart the economy.

In China, official data showed inflation came in at 2.7 percent last month, which a senior dealer at a major Japanese bank said reflected solid retail sales demand. The figure was up from 2.1 percent in May and also beat expectations for 2.5 percent.

"Caution has been growing that China is slowing down quickly," the Japanese bank dealer told Dow Jones Newswires.

"The data suggesting solid retail sales demand gave some relief," he said.

The dollar was lower against other Asia-Pacific currencies.

It fell to 60.06 rupees from 60.98 rupees on Monday, to Sg$1.2779 from Sg$1.2855, to Tw$30.10 from Tw$30.16 and to 1,143.60 South Korean won from 1,152.24 won .

It also slipped to 31.38 Thai baht from 31.46 baht, to 9,980 Indonesian rupiah from 10,010 rupiah and to 43.59 Philippine pesos from 43.73 pesos.

The Australian dollar rose to 91.26 US cents from 90.48 cents, while the Chinese yuan changed hands at 16.49 yen against 16.48 yen.

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http://www.globalpost.com/dispatch/news/afp/130709/dollar-firms-asia-fed-phase-out-mood-0