Dollar buoyed by Fed speculation

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Tokyo - The dollar rose in Asia on Tuesday after better-than-expected US manufacturing figures stoked speculation that the Federal Reserve will start tapering its stimulus before year's end.

The greenback fetched 103.25 yen in Tokyo afternoon trade, up from 102.94 yen on Monday afternoon in New York, surging to its highest level since late May.

The euro eased a tad to $1.3529 from $1.3538 while it rose to a five-year high of 139.83 yen from 139.36 yen, with the Japanese unit weighed by expectations the country's central bank will unveil fresh monetary easing measures to boost the economy.

In the United States the Institute for Supply Management (ISM) said on Monday that activity at US factories grew at a much faster rate in November than in October, notching up the sixth-consecutive monthly rise. Forecasts had been for growth to have slowed.

The ISM figures come ahead of a busy week of US economic news culminating with Friday's release of the November non-farm payrolls report.

“A December Fed taper is back on the cards, at least for markets,” National Australia Bank (NAB) said.

“While the manufacturing data was very good... retail sales data was not so rosy.”

Cautious US shoppers spent about 2.7 percent less than a year ago during the so-called Black Friday weekend which kicked off the holiday shopping period.

“It seems consumers need a little more time, and an improved labour market, before they are encouraged to spend some more,” NAB said.

The employment data is seen as a key marker for dealers trying to get a handle on the state of the world's largest economy. The Fed has said it will only cut back on its vast bond-buying scheme when the economy is strong enough to stand on its own. The central bank's next policy meeting begins on December 17.

Among the other US data due for release this week are third-quarter growth and home sales, while the Fed will also open up its Beige book on regional economies.

And the European Central Bank will hold a policy meeting this week, with investors looking to see if it ushers in any more monetary easing after last month cutting interest rates to a record low of 0.25 percent.

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

It rose to 32.22 Thai baht from 32.20 baht the previous day as tensions eased after two days of violent clashes between police and opposition protesters aiming to oust Prime Minister Yingluck Shinawatra.

The dollar also rose to 1,062.26 South Korean won from 1,058.46 won on Monday, to 62.40 Indian rupees from 62.23 rupees, to Sg$1.2569 from Sg$1.2537, to 43.76 Philippine pesos from 43.71 pesos, and to Tw$29.58 from Tw$29.56.

It fell to 11,858 Indonesian rupiah from 11,885 rupiah.

The Australian dollar fell to 90.83 US cents from 91.55 cents, while the Chinese yuan firmed to 16.92 yen from 16.78 yen. - AFP

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