Dollar steady in Asia amid easing economic concerns

The dollar was range-bound in Asian trade on Thursday, supported by better-than-expected durable goods orders which helped to calm market jitters about the US economy, dealers said.
The dollar was at 104.88 yen in Tokyo morning trade, up slightly from 104.71 yen in New York late on Wednesday.

The euro was steady at 1.5646 dollars after 1.5641 while firming to 164.09 yen from 163.73.

Investors were heartened by the better-than-expected April durable goods orders in the United States, dealers said.

Washington reported that April durable goods orders fell 0.5 percent, but most of the decline was in the transport sector. Excluding that segment, orders were up 2.5 percent.

The (dollar's) latest gains against the major currencies were driven by better news on the economy rather than lower crude oil prices," NAB Capital analyst John Kyriakopoulos wrote in a note to clients.

Official figures showed German inflation accelerated sharply in May, adding to worries about Europe's largest economy and further dashing hopes of a cut in eurozone interest rates.

According to an official projection based on data from six of Germany's 16 states, consumer prices rose 3.0 percent year-on-year, up from 2.4 percent in April and well above the ECB's target of just below 2.0 percent.

The ECB has left its key short-term interest rate unchanged at 4.0 percent since June 2007 to focus on keeping prices under control.

Ian Copsey, a senior financial analyst at Global Forex Trading, said foreign exchange markets were on a knife edge.

"What is very clear is that US figures are beginning to show a semblance of modest stability while European numbers continue to become more and more volatile," Copsey said.

Some market watchers said that the dollar was expected to remain in a narrow corridor against the yen for now.

"We expect the dollar/yen to be locked in a tight range," Chiba Bank analysts wrote in a note to its clients.

"There will be a mix of dollar buying after seeing the better than expected US economic data and selling pressure from exporters," they added.