Dollar slips in Asia ahead of key data

US Currency. AP FILE PHOTO

TOKYO, Japan – The dollar weakened in Asia Wednesday as investors look to key US data that will supply the latest clues as to when the Federal Reserve may start a draw down on its stimulus.

The greenback bought 102.39 yen in morning Tokyo trade, against 102.48 yen in New York Tuesday and well down from 103.25 yen in Asia.

The euro was mixed, buying $1.3594 and 139.20 yen compared with $1.3589 and 139.27 yen in US trade.

Investors are awaiting a string of US data this week, including third-quarter growth, home sales, the Fed’s Beige book on regional economies and private sector jobs and culminating with non-farm payrolls on Friday.

A strong set of figures will increase speculation of a pullback as early as the bank’s next policy meeting in two weeks’ time.

Currency players will also be keeping an eye on eurozone growth data and a European Central Bank (ECB) meeting on Thursday, analysts said.

Speculation has been building that ECB policymakers will launch fresh easing measures after cutting interest rates to a record low of 0.25 percent last month.

“Cautiousness seems to be the dominant theme ahead of the key ECB decision and US non-farm payroll later in the week,” Credit Agricole said.

The dollar enjoyed a rally at the start of the week after a survey of factories showed US manufacturing activity grew at a much faster rate in November than in October, notching up the sixth-consecutive monthly rise. Forecasts had been for a slowdown.

“A batch of solid US data (Wednesday)… could see market talk of a December taper intensify, leading to a heightening of unease ahead of the all important jobs report on Friday,” Credit Agricole said.

Speculation has been building that ECB policymakers will launch fresh easing measures after cutting interest rates to a record low of 0.25 percent last month.