Dollar gains in Asia over latest US factory data

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TOKYO: The dollar rose in Asia on Tuesday, supported by a pickup in US manufacturing activity, but fears about the escalating crisis in Ukraine hung over currency markets.

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In afternoon trade the greenback fetched 101.67 yen, up from 101.44 yen on Monday in New York City where it touched a one-month low of 101.20 yen, as investors flocked to the safety of the Japanese unit.

The euro strengthened to 139.63 yen from 139.34 yen, while buying $1.3732 against $1.3737.

On Monday, Russia’s intervention in Ukraine sent Moscow stock markets tumbling by more than 10 percent and the ruble plunging to historic lows—prompting a surprise rate hike by the central bank in Moscow.

Russia’s parliament voted on Saturday to allow President Vladimir Putin to send troops into Crimea, a mainly Russian-speaking Black Sea peninsula in the southeast of the ex-Soviet state.

The move sparked global outrage and Western powers have threatened to expel Russia from the Group of Eight leading industrial countries, while the United States is pushing for strict economic sanctions.

“Markets are on edge, watching the headlines and waiting to see how the escalating tensions between Ukraine and Russia play out,” National Australia Bank said.

“On a far more positive note, the US manufacturing series was better than expected, despite the poor February weather,” it added.

US manufacturing activity picked up last month, data showed on Monday, after slowing in January owing to severe winter weather, while home building pushed US construction spending higher.

Consumer spending, the main driver of the US economy, climbed 0.4 percent in January from December.

Despite the upbeat data, tensions in Ukraine are likely to fuel demand for safe-haven currencies such as the yen, dealers said.

However, the Japanese was facing pressure as the threat of higher global energy costs meant a possible boost in demand among Japanese importers for dollars to pay the nation’s rising post-Fukushima energy bills, they added.

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

It rose to Sg$1.2703 from Sg$1.2674 on Monday, to 11,630 Indonesian rupiah from 11,575 rupiah, and to 62.08 Indian rupees from 61.91 rupees.

The greenback firmed to 44.82 pesos from 44.73 pesos, and to 1,072.54 South Korean won from 1,070.45 won while slipping to 32.55 Thai baht from 32.59 baht.

The Australian dollar edged up to 89.29 US cents from 89.11 cents, and the Chinese yuan bought 16.50 yen against 16.47 yen.

AFP

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