The dollar rose against the yen and the euro in Asian trading Thursday as the market awaited the release of data on U.S. investor inflows.
The U.S. dollar was trading at 107.87 yen in Tokyo by midafternoon, up 0.61 yen from late Wednesday and above the 107.39 yen it bought in New York later that day. The euro slipped to US$1.2874 from US$1.2950 late Wednesday in Tokyo and to 138.82 yen from 138.88 yen.
The dollar was higher against most other regional currencies, surging to 54.240 Philippine peso from 54.06 the previous day, and to 1.6508 Singapore dollar from 1.6440. It also edged up to 1,014.6 South Korean won from 1,011.5.
Players were also encouraged that the dollar held its ground against the euro in overnight trading despite a smaller-than-expected rise in March U.S. retail sales.
Some players expect the dollar to rise regardless of the outcome of the inflows report for February, set to be released Friday. The dollar has already survived disappointing the retail sales data as well as trade balance data also released earlier this week.
Sentiments have been bullish on the dollar lately because of expectations for higher U.S. interest rates. Higher interest rates make assets denominated in the dollar more attractive to investors, boosting the currency.
"We're seeing the same pattern, which is the dollar being bought up after weak U.S. data," said Jun Kitazawa, vice president of foreign exchange at BBH Investment Services. "I expect the same reaction Friday."
Treasury International Capital System data measure whether the U.S. is attracting enough portfolio inflows to fund its massive current account deficit, analysts say.
Worries about the giant U.S. trade and budget deficits are the main factor weighing on the dollar since last year.
In New York trading, the dollar was little changed vs. the euro despite a weak U.S. retail sales report but fell back against the yen. Government data released Wednesday showed that retail sales were up 0.3 percent in March although the market had expected a 0.8 percent rise.
The market focus seems to have shifted in recent sessions to technical factors. On Tuesday, the dollar rallied despite a report showing the U.S. current account deficit widened to a new record.
Analysts say the dollar may remain range bound until the market gets a better picture of the outlook for U.S. Federal Reserve policy.