Dollar holds firm against euro

February 08, 2011 | 14:43

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The dollar held firm against the euro in Asia on Tuesday in the absence of fresh trading pegs after inching up in New York on weaker-than-expected German data.

The euro bought $1.3577 in Tokyo morning trade, a shade lower than $1.3581 in New York late Monday. Against the Japanese unit, the common currency was flat at 111.78.

The dollar was flat at 82.32 yen.

The euro fell on Monday after data showed German industrial orders tumbled 3.4 per cent in December, much worse than forecasts for a drop of 1.5 per cent.

The euro may fall to $1.3520 later Tuesday as technical analysis suggests a downward bias amid a lack of trading cues, Satoshi Tate, senior dealer at Mizuho Corporate Bank, told Dow Jones Newswires.

The dollar also got support from higher yields on US Treasury bonds amid expectations for a recovery in the world's largest economy, dealers said.

Investors were also reassessing the prospect of rate hikes in the eurozone, which had boosted the single currency in recent weeks.

"For US bond yields to gain further, better US economic indicators and more hawkish Fed comments are needed," Tate said.

He added that investors would likely pay attention to speeches later Tuesday by the Fed presidents in Atlanta, Dallas and Richmond.

AFP

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