SINGAPORE: The euro turned higher against the dollar in volatile Asian trade Tuesday as the region's central banks snapped up the European currency, analysts said.
The euro changed hands at $1.4121 in the afternoon , up from $1.4089 late on Monday in New York, while it also rose to 115.23 yen from 115.22.
The greenback edged down to 81.60 yen from 81.69 yen.
Asian central banks snapped up the euro after it weakened earlier in the day, analysts said.
"Some treasuries are starting to buy the euro, my guess is that probably there has been some arrangement with some of the governments to support the euro," said Simon Teo, senior dealer of Phillip Futures in Singapore.
"I suspect maybe China is stepping up on this one to diversify some of their assets, maybe even Japan."
Asian central banks had since last year been diversifying their assets from the greenback on expectations that the US economy was not going to perform well in the near future.
Hints by European Central Bank president Jean-Claude Trichet that it could raise interest rates next month was also a draw for investors.
However, the European currency remains weighed by worries about eurozone debt.
Against other Asian currencies, the greenback fell to Sg$1.2611 from Sg$1.2625, to 8,701.00 Indonesian rupiah from 8,707.00, to Tw$29.48 from Tw$29.49 and to 1,109.94 South Korean won from 1,113.70.
It gained to 30.36 Thai baht from 30.28 and was unchanged at 43.49 Philippine pesos.
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