Dollar Makes Modest Gains in Asian Trading - 2.4.2012

US Dollar The dollar gained some ground against its major counterparts in Asian trading hours, however the currency’s index remained close to its Friday’s close at 79.00. At the same time Asian stocks were mainly positive after China’s Purchasing Managers Index climbed to the highest level in 12 months, reaching 53.1 in March from 51 in February. Recent preliminary PMI estimations from HSBC and Markit Economics suggested the measure of manufacturing activity might contract in March. Another report came from Australia, where the number of building approvals unexpectedly dropped in February by 7.8%, sending the nation’s currency from 1.0446 to 1.0381 versus the greenback. In the United States the data may show today manufacturing grew in March and construction spending increased. The ISM manufacturing index probably rose to 53 from 52.4 in February, while the index of spending on building projects may have increased by 0.7%. Euro The single currency is close to its one-month high of 1.3385 versus the dollar, settled last week. In Asian trading hours the pair traded at 1.3331-1.3375 after euro area finance ministers approved last week a temporary increase in the region’s rescue fund to 940 billion euros. Today the data from Europe may show the unemployment rate in the region rose to 10.8% in February from 10.7% in January, while PMI manufacturing index remained unchanged at 47.7 in March, according to preliminary estimations. Japanese Yen The yen weakened slightly versus the dollar as well as versus the euro in Asian trading today after a key Japanese business outlook survey showed expectations are still weak. The greenback traded at 82.75-83.30 versus the yen, compared with Friday’s close at 82.78 and the single currency – at 110.55-111.13 against the yen, compared with Friday’s close at 110.41. The Tankan index showed largest companies’ current index and sentiment index remain negative after the first quarter, according to the central bank.