Dollar eases in Asian trade

Singapore -The dollar eased in Asian trade Friday but maintained most of its gains after Federal Reserve head Janet Yellen indicated US interest rates could rise early in 2015.

The greenback bought ¥102.37 in Singapore afternoon trade, easing from ¥102.42 in late New York Thursday, while the euro edged up to $1.3787 from $1.3779.

It had been sitting at $1.3930 and ¥101.51 before the Fed remarks.

The single currency dipped to ¥141.13 from ¥141.14.

However, trading was subdued with Japanese financial markets closed for a holiday.

Yellen said Wednesday the US may start raising interest rates "around six months" after the Fed's stimulus programme ends, suggesting borrowing costs will go up in the first half of 2015.

Her comments came after the Fed said it would cut its monthly asset purchases by a further $10bn for a third successive meeting.

Many analysts had forecast an interest rate rise around the back end of next year.

"There is an obvious shift in market expectations towards more hawkishness by the Fed," Phillip Futures said in a market commentary.

"Yellen expressed optimism in the rate of growth (of the US economy) and said interest rates could be raised around six months after the complete removal of asset purchases. This means the Fed may raise rates as soon as this time next year," it said.

Phillip Futures added that "this raises further the prospects for strengthening in the dollar and reduces further the prospects for inflation".

French bank Credit Agricole said in a market statement: "More supported rate expectations may suggest that the greenback is about to become more sensitive to incoming growth data.

"If so, there may be room for the currency to appreciate further, especially if prospective data proves more constructive."

Saktiandi Supaat, head of the forex research at Maybank in Singapore, said that Yellen's remarks on interest rates supported the dollar.

"Against the Asian and emerging market currencies, generally it would result in a higher dollar," Supaat told AFP.

Against other Asia-Pacific currencies the dollar was mixed.

It eased to 61.05 Indian rupees Friday afternoon from 61.15 rupees on Thursday, while the Australian dollar firmed up to 90.68 US cents from 90.17 cents.

But the greenback strengthened to 11 446 Indonesian rupiah from 11 425 rupiah, to 45.25 Philippine pesos from 45.06 pesos and to 1 080.85 South Korean won from 1 075.74 won. It also rose to Sg$1.2770 from Sg$1.2735 and to 32.42 Thai baht from 32.35.

The Chinese yuan fetched ¥16.44 against ¥16.42 on Thursday.