Dollar weakens in Asia as US, eurozone data disappoint

TOKYO- The dollar weakened in Asia Friday following a disappointing batch of data out of the United States and eurozone that led investors out of high risk assets.

In midday Tokyo trading, the greenback fetched 101.47 yen, down from 101.57 yen in New York and 101.83 yen in Tokyo earlier Thursday.

The euro bought $1.3718 and 139.22 yen compared with $1.3711 and 139.26 yen.

Gross domestic product (GDP) across the 18-nation eurozone expanded just 0.2 percent in January-March, data agency Eurostat said, half the 0.4 percent that had been forecast.

Italy, the third-biggest economy in the bloc, shrank 0.1 percent in that period, while Portugal, which is about to emerge from a bailout, contracted 0.7 percent.

Separately Eurostat confirmed eurozone inflation rose to 0.7 percent in April, up from the 0.5 percent reported in March but still well off the European Central Bank’s 2.0 percent target.

While there was a bright spot with Germany seeing growth double to 0.8 percent, the data add to expectations the European Central Bank (ECB) will ease monetary policy conditions to kick-start growth in the region and soothe fears of deflation.

“The euro has been capped of late, mainly on the back of lower-than-expected growth data and as most ECB members supported the view of more aggressive monetary policy action being considered as soon as next month,” Credit Agricole said.

“However, it appears that the jury is still out when it comes to aggressive measures,” it added.

Adding to the unease, US industrial production fell 0.6 percent in April after two months of gains, although new jobless claims hit a seven-year low last week.

“Markets prefer to focus on the negative at the moment… and this dominated over some relatively good news,” National Australia Bank said. “That tone is likely to stay for now.”