High-flying dollar slips in Asia

Tokyo - The dollar retreated in Asia on Monday after surging last week on hints by the US Federal Reserve of higher than expected interest rates and Scotland's decision to stay in the United Kingdom.

The greenback slipped to ¥108.80, from ¥108.99 in New York on Friday and a six-year high above ¥109 in Tokyo earlier on Friday.

The euro firmed to $1.2861 and ¥139.93 from $1.2832 and ¥139.84.

The pound fetched $1.6352, against $1.6289 in New York as Scotland's "No" vote eased fears over the economic impact of a split from the United Kingdom.

The dollar's upward momentum could soften for now after US Treasury yields declined last week, said a senior dealer at a major European bank in Tokyo.

"The dollar could hit a speed bump before reaching 110 yen," he told Dow Jones Newswires.

But Credit Agricole said investors' interest in the dollar could return sooner rather than later - as the Fed suggested interest rates might rise more than initially forecast when they are eventually increased, possibly from mid-2015.

"With event risk-induced uncertainty out of the way and healthy US economic releases expected, risk appetite will likely remain supported in the days ahead," it said in a note.

Higher risk appetite is a negative for the yen, which is seen as a safe haven in times of turmoil or uncertainty.

Expectations of fresh monetary easing by the Bank of Japan have also hit the Japanese unit.

Currency rates hardly moved as the Group of 20 major world economies said Sunday they could overcome geopolitical tensions and financial risks, as the club pursues an ambitious goal of raising collective gross domestic product by 2% above current projections over the next five years.

The dollar was mostly lower against other Asia-Pacific currencies.

It fell to 1 040.75 South Korean won from 1 044.70 won on Friday, to 44.42 Philippine pesos from 44.56 pesos, to Tw$30.19 from Tw$30.23, and to Sg$1.2655 from Sg$1.2673.

The greenback also declined to 32.17 Thai baht from 32.23 baht, to 11 961 Indonesian rupiah from 11 976 rupiah and to 60.77 Indian rupees from 60.81 rupees.

The Australian dollar weakened to 89.36 US cents from 89.61c, while the Chinese yuan fetched ¥17.70 from ¥17.75.