US dlr funding a notch lower, yr-end strains remain

SINGAPORE, Dec 2 (Reuters) - U.S. dollar funding rates were a notch lower in Asia on Tuesday, albeit at levels much higher than last month's lows which suggested banks continued to hoard funds as the end of the year approached.

Overnight dollar funding costs in Singapore fell to 0.986 percent from Monday's 1.125. Overnight rates had fallen close to zero last month, after the Federal Reserve and other global central banks pumped cash through traditional as well as unconventional channels into money markets. Three-month dollar rates in Singapore SIUSDD=ABSG drifted to 2.23 percent from 2.24 percent.

A trader in Kuala Lumpur said dollar funding rates were gradually rising. "But I think they should ease off after the month-end effect," she said. (Reporting by Vidya Ranganathan; Editing by Kazunori Takada)