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Dollar weakens in Asia ahead of US data

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(Globalpost/GlobalPost)

The dollar weakened in Asia Monday ahead of a raft of US economic data that will provide a better idea of the future of the Federal Reserve's stimulus programme.

The greenback bought 102.38 yen in Tokyo afternoon trade, against 102.42 yen on Friday in New York, while the euro strengthened to $1.3604 from $1.3590.

The European single currency also rose to 139.29 yen from 139.18 yen as traders await a European Central Bank (ECB) meeting.

This week in Washington will see the release of data on third-quarter growth, November non-farm payrolls, manufacturing activity and home sales, while the Fed will also open up its Beige book on regional economies.

The figures will give dealers a handle on the state of the world's largest economy, while Fed policymakers are expected to use them when considering their plans for the bank's $85 billion a month stimulus.

The bank's next policy meeting begins on December 17.

"Over coming days there will be plenty of evidence to finalise opinions about what the Fed will do at its meeting," Credit Agricole said. "We maintain the view that the Fed will likely begin to taper in January."

"Monetary policy will be at the heart of the market's radar-screen throughout the coming weeks," it added.

"Even if the first rendezvous will be with the ECB, the behaviour of the Federal Reserve Bank in the US will be the main point of scrutiny."

Investors will be watching the ECB meeting this week to see if it ushers in any more monetary easing after recently cutting interest rates to an all-time low of 0.25 percent.

The dollar was mixed against other Asia-Pacific currencies Monday afternoon.

It rose to 32.20 Thai baht from 32.11 baht Friday, after weekend street violence in Bangkok which left four dead and dozens wounded, while the dollar edged up to 1,058.46 South Korean won from 1,058.34 won, and to 11,885 Indonesian rupiah from 11,868 rupiah.

The greenback slipped to 62.23 Indian rupees from 62.29 rupees, to Sg$1.2537 from Sg$1.2553, to 43.71 Philippine pesos from 43.76 pesos, and to Tw$29.56 from Tw$29.60.

The Australian dollar strengthened to 91.55 US cents from 90.87 cents, while the Chinese yuan inched up to 16.78 yen against 16.74 yen.

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http://www.globalpost.com/dispatch/news/afp/131202/dollar-weakens-asia-ahead-us-data-0