Dollar range-bound before Fed report

TOKYO (AFP) – The dollar moved narrowly against the yen and euro in Asia Wednesday as investors waited for a US Federal Reserve report for clues on the outlook for the world's biggest economy, traders said.

The dollar stood at 90.68 yen in Tokyo afternoon trading, compared with 90.72 yen late Tuesday in New York.

The euro bought 1.4935 dollars against 1.4937 dollars in New York while easing to 135.45 yen from 135.65 yen.

The dollar saw modest gains Tuesday following disappointing US economic data, which pushed stock markets into reverse after recent gains and prompted flows into safe havens, but trading became subdued in Asia.

"There were no active moves seen today. The market is just waiting for the Beige Book," to be released later Wednesday by the Federal Reserve, said Shigeru Nakane, forex sales manager at Resona Bank.

He said market players were "looking for a trading peg" from the Beige Book, which is based on reports from the Fed's 12 districts and used for its policy making.

The dollar may rise briefly later in the day as Japanese fund players are expected to launch their buying for new trust funds, dealers said.

Still, the greenback will not be able to rise above 91.50 yen and remains weak in the longer term, they said.

"With the US interest rates low and global stock prices somewhat stable, I don't think the dollar is attractive now.

"Any rises in the dollar will likely be capped around 91 yen, where many Japanese exporters are interested in selling," Shinichi Hayashi, a dealer at Shinkin Central Bank, told Dow Jones Newswires.

Dealers are also betting on the European unit breaking above the psychologically important 1.50-dollar line in the coming days.

"Players are hesitant about buying the euro aggressively due to European officials' complaints about a high euro, but Europe's interest rates which are higher than those in the US will likely make players push the euro up eventually," Hayashi said.

The dollar was higher against Asian currencies.

It rose to 1,178.00 South Korean won from 1,165.83 a day earlier, to 1.3939 Singapore dollars from 1.3886 and to 9,440.00 Indonesian rupiah from 9,363.75.

The greenback also firmed to 46.97 Philippine pesos from 46.51, to 32.35 Taiwan dollars from 32.26 and to 33.42 Thai baht from 33.35.