Dollar rangebound amid renewed optimism

TOKYO: The dollar moved narrowly against other major currencies in Asia on Tuesday after better-than-expected US data helped bolster optimism over prospects for the world's biggest economy, analysts said.

The dollar held steady at 76.84 yen in Tokyo afternoon trade, almost flat from New York late Monday.

The euro fetched $1.4515 and 111.55 yen, compared with $1.4510 and 111.52 yen.

Risk-appetite has improved on speculation of "more monetary policy stimulus from the US Federal Reserve and better news on US consumer spending, which eased fears the economy was falling off a cliff," National Australia bank said in a note.

The US Commerce Department said Monday that consumer spending, a pillar of the world's largest economy, rebounded 0.8 percent in July, after a 0.1 percent dip in June, the fastest pace since February.

The benchmark Nikkei 225 index of the Tokyo Stock Exchange ended up 1.16 percent as a softer yen boosted exporters.

Market reaction was muted towards the election of finance minister Yoshihiko Noda as prime minister.

"It's likely that with higher taxes and more fiscal austerity with Noda as PM that deflationary pressure will not be alleviated, which will keep bond yields low," said an equity trader at a foreign brokerage.

"On the upside, corporate borrowing costs are not going to rise, but neither will the dollar-yen rate, which serves as a heavier weight on Japan exporter shares right now," he told.

Noda said he would announce steps to deal with the strong yen once he had put together his new government but that had little impact on currency rates.

The dollar was mixed against other major Asian currencies.

It rose to 42.51 Philippine pesos from 42.30 on Monday, to Tw$29.03 from Tw$29.00 and to 8,530.00 Indonesian rupiah from 8,525.00.

But it eased to Sg$1.2052 from Sg$1.2064 and to 1,070.70 South Korean won from 1,073.50 while it was flat at 29.97 Thai baht. (AFP)