Dollar firmer in Asian trade

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Tokyo - The dollar firmed in Asia on Thursday after a Federal Reserve report boosted optimism over the US economy, while investors await a European Central Bank (ECB) policy meeting.

The greenback bought 102.48 yen, against 102.33 yen in New York on Wednesday afternoon, with confidence also given support by easing tensions in Ukraine as Russian and Western leaders try to find a way out of the crisis.

The euro slipped to $1.3725 from $1.3736 while it inched up to 140.67 yen from 140.57 yen.

The Australian dollar jumped to 90.20 US cents from 89.60 cents on Wednesday afternoon in response to robust trade and retail data.

On Wednesday, the Fed's Beige Book regional survey of the US economy said severe winter weather dented activity in January and early February, but that the outlook in most areas “remained optimistic”.

The findings were eagerly awaited by investors as they mine for clues about future reductions in the Fed's stimulus programme, which hinges on a firm recovery in the world's biggest economy.

The upbeat Fed report suggested a continued tapering of the scheme, which is a plus for the dollar.

“There didn't seem to be anything meaty on the negative side in the book that would see the Fed pause in its taper” at its next meeting this month, National Australia Bank said.

It added that tensions over Russian troop presence in southern Ukraine were “seemingly contained”, with diplomats from Moscow and the United States holding talks to bring an end to the crisis.

Calm returned to financial markets on Wednesday after Russian President Vladimir Putin played down the prospect of war.

Global markets tumbled on Monday after lawmakers voted to allow Putin to send troops into Crimea, a mainly Russian-speaking peninsula in the south-east of Ukraine, following the ousting of the country's pro-Moscow government.

Investors are keeping an eye on the ECB's next policy meeting later in the day as well as Germany factory orders data to see if policymakers will launch further economic-stimulus measures.

Analysts have said the ECB is unlikely to cut key interest rates following better-than-expected data in the past few days, but the decision will likely be a close call.

A senior dealer at a Japanese bank told Dow Jones Newswires that following a halt to slides in emerging market currencies, including the Russian ruble, some traders were shifting their attention to major currencies ahead of a US February jobs report on Friday. - AFP


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