Dollar slips in Asian trade

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AFP FILE PHOTO

TOKYO–The dollar slipped in Asia on Friday as poor US data weighed, while the euro was mixed after an upbeat German business climate index propelled it higher in New York.

In late morning Tokyo trade, the greenback weakened to 98.81 yen from 99.24 yen in New York on Thursday and above the 100 yen mark this week.

The euro was stronger on the dollar at $1.3283 from $1.3277, while the single currency dipped to 131.25 yen from 131.75 yen in US trading.

The dollar has been under pressure as a jump in jobless claims and weak demand for durable goods, such as cars and washing machines, dented hopes the world’s largest economy had cemented a recovery.

That, in turn, threw into question the timing of the US Federal Reserve’s plan to roll back its massive stimulus programme. The bank holds a policy meeting next week.

Comments from Fed officials, including its chief Ben Bernanke, have kept investors guessing about a roll back on the quantitative easing scheme, which it has said would depend on the strength of fresh economic data.

“Markets are still trying to digest what Bernanke has said,” Ken Jakubzak, founder of KMJ Capital, told Dow Jones Newswires.

“If they really do start to reduce [bond purchases] in September, then the dollar will get some support.”

A pull-back on Fed stimulus would mean fewer dollars sloshing around in the financial system, lifting demand and in turn sending the currency higher.

Also Friday, deflation-plagued Japan logged its first monthly price rise in over a year, but the June data was mainly driven by surging energy costs rather than a broad uptick in the price of retail goods.

The euro hit a one-month high on the dollar Thursday at $1.3296 as the Ifo economic institute’s index showed German business confidence rose for the third month in a row in July.

The closely watched measure suggested companies in Europe’s top economy were shrugging off the recession across the wider eurozone.

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