Dollar mixed in Asian trade

AP FILE PHOTO

TOKYO – The dollar was mixed in Asian trading on Monday, after the unit last week surged to its highest level against the Japanese yen in more than two years following positive jobs data and a deal on the fiscal cliff.

The greenback bought 88.02 yen in Tokyo morning trade, down from 88.15 yen in New York on Friday, after earlier hitting a peak of 88.41 yen, its highest level since mid-July 2010.

The euro slipped to $1.3057 from $1.3067, while it was also weaker at 114.92 yen from 115.19 yen.

On Friday, the dollar notched up gains as the US Labor Department said the country’s unemployment rate was unchanged at 7.8 percent in December while job growth continued at a modest pace.

Also, the latest ISM index on the service sector showed unexpected growth in December, the fastest in 10 months, led by new orders and employment.

A deal on the US fiscal cliff averted across-the-board tax hikes and automatic spending cuts which some had feared could have tipped the world’s biggest economy back into recession.

The agreement helped the dollar, although the International Monetary Fund, rating agencies and analysts warned that the critical problem of deficits and debt still hang over the US economy.

Dealers said the market would turn its focus towards central banker speeches this week, after minutes from the last US Federal Reserve meeting sent the dollar surging against the euro and yen.

Investors interpreted the meeting minutes as a signal that monetary easing could end sooner than expected. Policy tightening tends to support the dollar.

Markets will also be looking to the European Central Bank’s monthly meeting this week for clues about future policy moves.

The yen meanwhile has been under selling pressure after Japan’s new prime minister, Shinzo Abe, vowed to push for aggressive monetary easing as he centres his first weeks in power on fixing Japan’s long-suffering economy.