Dollar rangebound in Asia

The dollar was little changed in Asian trade on Tuesday after surveys suggested that the slowdown in the US economy might be less severe than many have feared, dealers said.

But they also said a full recovery in the US economy was not yet in sight as it will take at least a few more months to confirm an end to the worst of the US economic woes triggered by problems in the housing market.

The Bank of Japan was wrapping up a two-day monetary policy meeting, but with interest rates widely expected to be left on hold at 0.5 percent, dealers said the market impact was likely to be muted.

The dollar was steady at 104.29 yen in Tokyo morning trade compared with 104.31 late Monday in New York.

The euro rose slightly to 1.5534 dollars against 1.5509 and to 161.95 yen from 161.76.

The dollar-buying trend seen overnight in New York initially continued in Tokyo, said Saburo Matsumoto, chief of forex strategist at Sumitomo Trust Bank.

The dollar had risen moderately in New York overnight after the Conference Board, a business research group, said that its leading economic indicators rose 0.1 percent in April to mark the third straight monthly gain.

"But the buying sentiment was offset by another surge in oil prices, which eroded earlier gains (for stocks) on Wall Street overnight," Matsumoto said.

Oil prices closed at a record high of 127.05 dollars a barrel in New York on Monday.

"The US economy is still recuperating," Matsumoto said. "Trading is expected to continue its ups and downs ... as players are trying to find a trading direction while monitoring key economic indicators."

US wholesale inflation data and a report on German investor confidence from the ZEW institute were both due later Tuesday.

Dealers also said the minutes of the Federal Open Market Committee meeting on April 29-30, to be released on Wednesday, may shed more light on the outlook for US interest rates.

The Fed cut key interest rates by 25 basis points at the meeting, the smallest reduction this year. Investors took it as a signal of the likely end of the rate-cutting cycle.