Dollar gains on upbeat data

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Tokyo -

The dollar rose in Asia on Tuesday, supported by a pickup in US manufacturing activity, but fears about the escalating crisis in Ukraine hung over currency markets.

In morning trade the greenback fetched 101.68 yen, up from 101.44 yen on Monday in New York where it touched a one-month low of 101.20 yen as investors flocked to the safety of the Japanese unit.

The euro strengthened to 139.54 yen from 139.34 yen, while it weakened to $1.3722 from $1.3737.

On Monday, Russia's intervention in Ukraine sent Moscow stock markets tumbling more than 10 percent and the rouble plunging to historic lows - prompting a surprise rate hike by the central bank in Moscow.

Russia's parliament voted Saturday to allow President Vladimir Putin to send troops into Crimea, a mainly Russian-speaking Black Sea peninsula in the southeast of the ex-Soviet state.

The move sparked global outrage and Western powers have threatened to expel Russia from the Group of Eight leading industrial countries, while the United States is pushing for strict economic sanctions.

“Markets are on edge, watching the headlines and waiting to see how the escalating tensions between Ukraine and Russia play out,” National Australia Bank said.

“On a far more positive note, the US manufacturing series was better than expected, despite the poor February weather.”

US manufacturing activity picked up last month, data showed Monday, after slowing in January owing to severe winter weather, while home building pushed US construction spending higher.

Consumer spending, the main driver of the US economy, climbed 0.4 percent in January from December.

Despite the upbeat data, tensions in Ukraine are likely to fuel demand for safe-haven currencies such as the yen, dealers said.

However, the yen was facing pressure as the threat of higher global energy costs meant a possible boost in demand among Japanese importers for dollars to pay the nation's rising post-Fukushima energy bills, they added. - Sapa-AFP


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