Dollar ticks up in Asia but economy fears cap gains

TOKYO- The dollar ticked up in Asia on Tuesday but its gains were limited by concerns over slowing global economic growth and the possibility the Federal Reserve will refrain from an early interest rate hike.

In midday trading, the dollar bought 107.14 yen, up from 106.83 yen in New York but still sharply down from 107.79 yen in Tokyo on Friday before a three-day weekend.

The euro slipped to $1.2723 from $1.2753 in US trade, while it inched up to 136.32 yen from 136.25 yen, ahead of German investor sentiment data later in the day.

National Australia Bank said in a note that the greenback was “suffering from strengthening conviction that the Fed may play it ‘lower for longer'” on interest rates owing to concerns about global growth and its effects on the US economy.

A string of weak data from Japan, China and the eurozone has fanned fears about the global outlook, while the Federal Reserve also said it was concerned about the outlook.

That has tempered expectations the Fed will lift rates from their record lows before mid-2015, despite the US economy picking up pace.

Dealers will be keeping an eye on the release of Germany’s ZEW investor confidence index following a slew of negative indicators from the eurozone’s biggest economy.

“Today, European releases will dominate headlines and if anything could intensify recent worries on growth prospects” in the eurozone, Credit Agricole said.