Dollar steady in Asian trade

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Published Aug 15, 2014

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Tokyo - The dollar held steady in Asia on Friday on easing concerns over the situation in Ukraine as Russian President Vladimir Putin called for an end to the crisis in the violent-wracked country.

In Tokyo midday trading, the greenback fetched 102.51 yen, up from 102.45 yen in New York.

The euro bought $1.3361 and 136.95 yen, mixed from $1.3365 and 136.93 yen in US trade, after the release on Thursday of weak eurozone economic data.

Growth in the 18-country eurozone ground to a halt in the second quarter, dragged down by France and Germany and casting a cloud over the crisis-hit region.

On Friday, investors moved into the dollar, which tends to decline during times of turmoil, as Putin said Moscow should not “fence itself off from the outside world” despite a plunge in East-West relations over the pro-Kremlin insurgency in Ukraine.

He added that Russia “will do everything that depends on us to make sure that the (Ukrainian) conflict ends as soon as possible”.

The comments also saw the Russian ruble shoot up to a nine-day high against the dollar because investors interpreted them as a signal by Putin that he preferred not to escalate the deadly Ukrainian crisis.

The Kremlin's relations with the West have hit their lowest point since the worst years of the Cold War because of Putin's alleged backing of Russian-speaking insurgents who are battling the pro-European authorities in the east of the ex-Soviet state.

In Iraq, the country's divisive premier Nuri al-Maliki dropped his bid to stay in power, bowing to huge domestic and international pressure as a jihadist-led offensive threatens to tear the country apart.

His decision was swiftly welcomed by the US and the UN.

But Junya Tanase, chief forex strategist at JPMorgan in Tokyo, said more negative headlines could re-ignite geopolitical jitters among investors, which would tend to drag the dollar down.

“Conditions aren't necessarily improving significantly, so you can't rule out the possibility that risk-averse sentiment will flare up again,” he told Dow Jones Newswires. - AFP

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