Dollar dips vs euro amid weak US data

A US 100-dollar bill. (AFP/Adek Berry)

NEW YORK: The dollar weakened against the euro on Tuesday, under pressure from disappointing data, while the yen tumbled after the Bank of Japan extended a special lending scheme for banks.

The euro bought $1.3759 around 2300 GMT, up from $1.3707 late Monday.

The dollar, however, rose against the Japanese currency, buying 102.40 yen, compared with 101.92 yen Monday. The euro rose to 140.89 yen from 139.70 yen.

The New York Federal Reserve's Empire State manufacturing index, based on survey of manufacturers in New York state, fell eight points to 4.5 this month, with new orders flat.

The fall was stronger than analysts expected and added to a series of weak US economic indicators that has raised concerns about the strength of US growth.

Meanwhile the National Association of Home Builders said its US sentiment index tumbled to 46 in February from 56 in January, though it mainly blamed severe weather conditions in much of the country.

"Traders are becoming somewhat skeptical as to the velocity at which the Federal Reserve will continue to cut its bond-buying program," said Jonathan Terela, a trader at Western Union Business Solutions.

The Fed has reduced asset purchases by $20 billion so far this year, to $65 billion in February, as it tapers the support aimed at holding down long-term interest rates to bolster the economy.

Markets are awaiting the minutes of the January 28-29 Federal Open Market Committee's monetary policy meeting on Wednesday in anticipation they will shed light on the central bank's policy direction.

The yen weakened after the Bank of Japan wrapped up a two-day policy meeting on Tuesday saying said it would keep its massive easing program in place, in line with expectations.

However, it also doubled the sum of loan schemes to banks in a bid to stimulate lending to firms and to finance growth-stoking projects such as environmental research and natural resources development.

The pound fell against the greenback, fetching $1.6681 compared with $1.6714 late Monday.

The dollar slipped to 0.8880 Swiss franc from 0.8914 franc.