Dollar Gains in Asia on U.S. Economic Optimism

Dec. 28, 2009
Strength reflected investors' expectations that the U.S. will recover from recession more quickly than other major economies

The dollar rose in Asian trade on Dec. 28 , supported by optimism about the outlook for the U.S. economy, dealers said.

The dollar gained to 91.57 yen in Tokyo afternoon trade from 91.47 in late Asian trade on Dec. 25, when markets in New York and London were closed for the Christmas holiday.

The euro slipped to $1.4382 from $1.4385 but edged up to 131.70 yen from 131.45.

The dollar's strength reflected investors' expectations that the United States will recover from recession more quickly than other major economies, said Marito Ueda, a currency trader at FX Prime.

U.S. data issued last week showed that orders for manufactured durable goods rose in November, while weekly claims for jobless benefits dropped to the lowest level since September 2008.

Markets were looking ahead to the next batch of U.S. indicators due this week, including the Conference Board's consumer confidence index and housing prices, analysts said.

"Both data should be consistent with a gradual recovery remaining on track," predicted Calyon economist Sebastien Barbe. But markets may be getting ahead of themselves in betting on early interest rate hikes by the U.S. Federal Reserve, he added. "The Fed will not raise rates soon. In addition, fiscal worries are also very much present in the US. In our view, those fears should limit the dollar's upside at some point," Barbe said.

Against Asian currencies, the dollar fell to 1.4063 Singapore dollars from 1.4064 on Dec. 25, to 1,169.80 South Korean won from 1,174.60, and to 46.40 Philippine pesos from 46.51.

The greenback firmed to 9,490 Indonesian rupiah from 9,480, while holding steady at 32.25 Taiwan dollars and at 33.38 Thai baht.

Copyright Agence France-Presse, 2009

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