Dollar pressured in Asia ahead of recovery plans

Agence France-Presse

Posted at Feb 09 2009 11:55 AM | Updated as of Feb 09 2009 07:56 PM

TOKYO - The dollar came under renewed pressure in Asian trade Monday after grim US data underscored the economic challenges for President Barach Obama's administration, dealers said.

The dollar slipped to 91.66 yen in Tokyo morning trade from 91.85 late Friday in New York. The euro was stable at $1.2940 from $1.2943 but fell to 118.60 yen from 118.87.

The US Senate was close to voting on a revamped stimulus bill of more than $800 billion as Obama presses for swift action to revive the world's largest economy.

But "basic qualms remain, such as whether it will be enough to boost the economy," said Mitsubishi UFJ Trust and Banking Corp's chief forex strategist Hideaki Inoue.

"And if it emerges in the coming months that Obama's stimulus measures are having little effect, markets will be swamped again with renewed uncertainty," he said.

The US government reported on Friday that unemployment spiked to a 16-year high of 7.6 percent in January from 7.2 percent in December as nearly 600,000 jobs were lost.

Non-farm payrolls plunged by a larger-than-expected 598,000 in January, the biggest drop since late 1974. That brought the total number of jobless people to 3.6 million since the recession began in December 2007.

There was also caution ahead of a speech on Tuesday -- one day later than initially planned -- by US Treasury Secretary Timothy Geithner on fresh measures to clean up the financial system.

Markets are expecting him to unveil details of a government-sponsored "bad bank" that would unload toxic assets off banks' books in a bid to unlock a persistent lending freeze. Media reported it may work with the private sector to purchase the uncollectible loans.

Meanwhile, the euro was weighed down by concerns over Russia, whose economy has close links with some members of the eurozone.

Fitch Ratings last week downgraded Russia amid a slump in energy prices, which have fuelled the country's boom in recent years.