TOKYO: The dollar rose in Asian trade Thursday on the back of robust economic data from the United States, while China's surging economy in the first quarter raised expectations of yuan revaluation.
The dollar firmed to 93.40 yen in Tokyo morning trade from 93.24 in New York late Wednesday. The euro dipped to 1.3649 dollars from 1.3656 but edged up to 127.48 yen from 127.33.
Stronger-than-expected US March retail sales data released overnight lifted the dollar, supporting views that consumer spending will boost growth in the first quarter of the year, Credit Agricole CIB analysts said in a client note.
March retail sales rose for the third straight month, by a greater-than-anticipated 1.6 percent.
The greenback will be supported by a positive tone in markets with the release of March factory data later Thursday, expected to show a 0.6 percent gain and strengthen the outlook for a sustainable recovery in the US economy.
China said Wednesday that first-quarter growth expanded 11.9 percent year-on-year, the fastest pace since the global financial crisis. Its consumer price index jumped 2.4 percent in March, in line with market expectations.
Dealers said the data underlined evidence of an overheating economy and highlighted the need for fast action to curb inflation threats.
The data fuelled "greater expectations of an imminent yuan revaluation as well as monetary tightening" in order to take the froth out of the economy, Credit Agricole CIB analysts said.
Asian currencies are likely to bounce from a yuan revaluation as well as from anticipation that other Asian central banks are moving to tighten their monetary policies, unlike their counterparts in advanced economies.
Singapore on Wednesday revalued its currency—the city-state's principal monetary tool—prompting speculation that China and South Korea may be next in line.
"Given this expectation, firm risk appetite, and more follow-through from Singapore foreign exchange move, the outlook for other Asian currencies remains bullish," Credit Agricole analysts said.
Australia, Malaysia, India, and Vietnam all hiked interest rates in recent months.
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