Dollar crawls higher in Asia

By Peter Gill Islamabad: The dollar edged up against the yen and the euro in Asian trade on Friday on growing concern that a US economic slump is curbing growth in Europe and Japan, dealers said.

The dollar firmed to 107.27 yen in Tokyo morning trade from 107.19 in New York late Thursday. The euro slipped to 1.5672 dollars from 1.5683 and to 168.08 yen from 168.12.

The dollar was supported by a worsening outlook for the European economies, said Yosuke Hosokawa, head of forex at Chuo Mitsui Trust Bank.

Downbeat surveys on eurozone business activity and German business sentiment dampened expectations that the European Central Bank will raise interest rates despite inflation worries, dealers said.

But with the US economy also weak, "it is still difficult to turn bullish (positive) on the dollar," Hosokawa said.

Concerns about the health of the US economy rose after US home sales fell another 2.6 percent in June to a 10-year low.

Markets were waiting for the release later in the day of more US data, including existing home sales and a consumer sentiment index.

Traders were also starting to look ahead to next week's July employment report for the US economy, which lost jobs for a sixth straight month in June.

Investors showed some concern after Japan's core inflation rate hit a new decade high of 1.9 percent in June on soaring commodity costs, dimming the outlook for consumer spending.

But the impact on the yen was muted because analysts do not expect Japan's central bank to raise its super-low interest rates from the current level of 0.5 percent any time soon, given the fragile health of the economy.