TOKYO: The dollar strengthened in thin Asian trade Wednesday, rebounding from losses in New York fuelled by a weak US manufacturing report, while a consumer confidence spike supported the euro.
The greenback fetched 99.72 yen, compared with 99.48 yen in New York Tuesday afternoon although it is still well down from the 100-yen levels seen at the end of last week.
The euro bought 131.73 yen and $1.3207, from 131.53 yen and $1.3222, after data showed eurozone consumer confidence jumped in July to its highest level in almost two years.
"With the coming of the summer holiday season, I sense there are fewer market participants," a senior dealer at a major bank in Japan told Dow Jones Newswires.
The dollar had been boosted by speculation the US Federal Reserve would soon begin winding down its massive stimulus drive, known as quantitative easing, as the world's largest economy improves.
But the greenback weakened in New York on Tuesday after the Richmond Fed's manufacturing activity index showed production in the central Atlantic region dropped sharply this month, led by declines in shipments and new order volumes.
The report caught investors off guard and comes after a surprising drop this week in US existing-home sales. The data had weighed on the dollar as it threw into question the timing of the Fed's draw down on its monetary easing programme.
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