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TOKYO: The dollar was narrowly mixed in subdued Asian trading on
Tuesday as players fretted about high oil prices and the state of
the US housing market, dealers said.
They said activity was muted as investors waited
for fresh leads after a long holiday weekend in the United States
and Britain on Monday.
The dollar edged up to 103.54 yen in Tokyo
afternoon trade from 103.43 in European trade on Monday.
The euro firmed to 1.5812 dollars from 1.5750
and to 163.70 yen from 162.89.
“There are no fresh leads in Tokyo and
participants are waiting for London trade to begin,” said Hidenobu
Fukuhara, a strategist at Resona Bank.
Investors kept a close watch on oil prices,
which last week hit a record high above $135 a barrel on concerns
about tight supplies and strong demand.
Recent market optimism about the possibility of
a recovery in the US economy has given way to renewed concerns about
the outlook, said Daisuke Uno, chief strategist at Sumitomo Mitsui
Banking Corp.
“Market sentiment turned pessimistic as
players are focusing on the damage higher oil prices are having on
the world economy,” he said.
The dollar has been pressured in recent days by
worries that high oil and commodity prices could weigh on consumer
spending in the US economy and hit corporate profits, hindering an
economic recovery.
Surging crude oil prices “are likely to keep
the dollar on the back foot this week since the US consumer looks
most vulnerable to rising gasoline prices,” NAB Capital strategist
John Kyriakopoulos wrote in a note to clients.
He said the greenback could also be pressured by
fading expectations of interest rate hikes by the US Federal Reserve
over the next year, despite inflation worries, “as any economic
recovery proves tepid.”
Meanwhile, the euro has been supported by
conjecture that the European Central Bank will not cut rates any
time soon amid stubborn inflation. The ECB voted earlier this month
to keep rates steady at 4.0 percent.
Traders noted ECB Vice President Lucas Papademos
was quoted as saying in an interview with a Greek newspaper that
rising oil prices were contributing to slower economic growth in the
eurozone.
Investors were also waiting for a batch of
economic data due this week in the US for fresh clues on the outlook
for Fed interest rates.
New housing sales and a report on consumer
confidence are due to be released later Tuesday while three Fed
officials are expected to give speeches over the course of the week.
-- AFP
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