Dollar slips as eurozone worries rekindled

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12:32 PM April 3rd, 2012

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April 3rd, 2012 12:32 PM

TOKYO — The dollar eased in Asian trade on Tuesday with the euro and safe-haven yen both rising ahead of key economic data due this week, including a US jobs report.

The greenback slipped to 81.84 yen in Asian trade, compared with 82.28 yen in New York Monday.

The euro gained to $1.3346 from $1.3325 in New York, and edged up to 109.27 yen, compared with 109.22 yen overnight in mixed trade.

The yen’s lure as a safe haven continued as investors became risk averse, with weak eurozone manufacturing and unemployment figures underscoring the debt-riddled currency bloc’s economic troubles, analysts said.

The region’s manufacturing activity dropped to a three-month low in March, with the malaise spreading to top economies Germany and France, according to a closely watched purchasing managers index (PMI) released Monday.

However, news of an agreement to boost the eurozone’s debt firewall

has tempered fears over the ongoing fiscal crisis.

The dollar was also weighed down by lower Treasury yields, making the US unit relatively less attractive, analysts said, despite

better-than-expected US manufacturing data.

China said Sunday that its manufacturing activity last month hit its highest level in a year, tempering recent concerns of a sharp slowdown in the world’s number-two economy.

In the near term, the dollar may test 80.00 yen and was tipped to drop further, said Kengo Suzuki, currency strategist at Mizuho Securities.

“Eighty yen will be an important mark, since it stands right between the February low of 76.02 yen and March’s high of 84.18,” he told Dow Jones Newswires.

“I think it’s likely that the dollar/yen will fall below this mark,” he added.

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