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Dollar up in Asia as Fed set to wrap up meeting

The euro -- which hit a more than 11-year low below $1.10 on Monday -- bought $1.1335 and 133.93 yen against $1.1380 and 134.19 yen in New York.

Dollar up in Asia as Fed set to wrap up meeting

Tokyo: The dollar recovered on Wednesday after taking a hit in New York in response to weak US economic data and a string of poor earnings reports, while traders look ahead to a Federal Reserve policy meeting later in the day.

In afternoon Tokyo trading, the greenback fetched 118.16 yen, up from 117.90 yen in US trade on Tuesday.

The euro -- which hit a more than 11-year low below $1.10 on Monday -- bought $1.1335 and 133.93 yen against $1.1380 and 134.19 yen in New York.

The dollar suffered a sell-off Tuesday after the release of figures showing US durable goods orders unexpectedly tumbled 3.4 percent in December, reminding investors that the world`s top economy still has weak spots, especially its exposure to the global economic slowdown.

Sentiment was also dented by weak earnings and negative outlooks from some of the world`s biggest firms, including Caterpillar, Microsoft, and conglomerate Procter & Gamble.

A Conference Board report that showed US consumer confidence jumped in January to its highest level in more than seven years was unable to lift the mood.

"It is remarkable how much impact this single weak report has had," National Australia Bank said, referring to the durable goods figures.

"This sharp reaction says much about market positioning. The long USD camp has continued to grow (for good reason), but some of the weaker followers are susceptible to being shaken out easily.

"Signs of a more cautious Fed... would cause even more of them to run."
The bank added that "any upgraded notes of concern from the Fed about soft inflation, weakness in trading partners, or the stronger USD would likely be taken as a dovish signal".

The Fed is not expected to make any significant decisions at its policy, but could refine its signals for a planned rate hike expected around mid-year.

Investors are also keeping an eye on Europe as Greece`s new anti-austerity government prepares to face off with its international creditors over its bailout. 

The US dollar surged to Sg$1.3569 at one stage, its highest since August 2010 and well up from Sg$1.3441 on Tuesday, after Singapore`s central bank unexpectedly eased monetary policy and pointed to a weaker inflation outlook.

The Australian dollar briefly climbed above 80 US cents before slipping back to 79.90 US cents after official figures showed the country`s inflation rate has accelerated. The Aussie bought 79.38 US cents on Tuesday.

"There was talk of a rate cut next week, so the solid CPI (consumer price index) numbers have significantly reduced that possibility, supporting the Australian dollar," Koji Fukaya, chief executive officer and currency strategist at FPG Securities, told Bloomberg News.

The dollar was mostly stronger against other Asia-Pacific currencies.

It rose to 61.48 Indian rupees from 61.45 rupees, to 12,524 Indonesian rupiah from 12,465 rupiah, to 32.63 Thai baht from 32.57 baht, and to 1,085.11 South Korean won from 1,079.75 won. 

It inched up to 44.17 Philippine pesos from 44.15 pesos, while it was unchanged at Tw$31.23.

The Chinese yuan fetched 18.91 yen against 18.90 yen.