Dollar weakens in Asia after poor US data

Published Apr 02, 2013 11:48am

—File Photo

TOKYO: The dollar fell against the yen and euro in Asian trade on Tuesday after weaker-than-expected US manufacturing data sparked renewed fears about the state of the world's biggest economy.

Worries over bailed-out Cyprus and a political stalemate in Italy also pressured the euro as currency markets look to a trio of central bank meetings this week.

In Tokyo afternoon trade the dollar bought 92.71 yen, down from 93.27 yen in New York on Monday.

The euro also weakened to 119.21 yen from 119.82 yen while it was stronger at $1.2859 from $1.2847.

On Monday the Institute for Supply Management said it’s closely watched US manufacturing index fell to 51.3 in March from 54.2 in February, reflecting growth for the fourth straight month but at a slower pace, and stoking renewed fears about the economy's recovery.

Investors are keeping a close eye on policy meetings from the Bank of Japan (BoJ), the European Central Bank (ECB) and Bank of England this week.

The BoJ's two-day meeting, which starts Wednesday, comes after a bank survey Monday showed a modest uptick in confidence among large Japanese manufacturers, although it came in below expectations.

Analysts have tipped the BoJ to launch aggressive policy measures at its first meeting under a new governor, who Tuesday vowed “bold” monetary easing.

However, Haruhiko Kuroda's comments failed to push down the yen “amid a growing view that the BoJ will struggle to meet expectations already priced into currency markets”, National Australia Bank said in a note.

A political stalemate in Italy following inconclusive elections and wider worries about the eurozone “remain troubling”, the bank added.

“To top things off, geopolitical tensions have risen further, with North Korea passing a measure aimed at giving nuclear weapons greater prominence in defence and South Korea promising a strong response.”

The dollar was mixed against other Asia-Pacific currencies Tuesday, firming to 1,117.06 South Korean won from 1,115.03 won on Monday, to 29.36 Thai baht from 29.32 baht, and 54.34 Indian rupees from 54.28 rupees and 40.85 Philippine pesos from 40.81 pesos. The greenback weakened to 9,742 Indonesian rupiah from 9,758 rupiah, to Sg$1.2377 from Sg$1.2418, and to Tw$29.85 from Tw$29.88.

The Australian dollar rose to $1.0459 from $1.0398 while the Chinese yuan fetched 14.96 yen against 15.13 yen.


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