* U.S. manufacturing data puts brake on dollar's rise
* Euro steady after slumping to six-week low as euro zone
* Kiwi gains 0.3 pct, pressure from dollar eases
By Sophie Knight
TOKYO, May 16 The dollar moved away from a fresh
4-1/2 year high against the yen hit in the previous session
after disappointing U.S. industrial data caused U.S. Treasury
prices to rise for the first time in a week, while the euro
wobbled near a six-week low.
The greenback was largely steady at 102.15 yen in early
Asian trade on Thursday after rising to 102.76 on
Wednesday before pulling back on data showing U.S. industrial
production fell more than expected in April, and the New York
Fed's "Empire State" business conditions index contracted in
The dollar index dropped 0.1 percent to 83.711 on
Thursday, extending a 0.6 percent fall on the data during the
previous session, though analysts say the greenback's current
bullish streak is likely to continue over the long run.
Against a basket of currencies, it is still up 0.8 percent
on the week, after gaining 1.2 percent last week.
"Of course data releases will impact the dollar, but the
real focus is the Fed's QE3 programme. People will be watching
statements from officials today and Bernanke at the weekend very
closely for hints on when they might exit," said Yoshio
Takahashi, currency strategist at Barclays in Tokyo.
"The data just shows that the U.S. economy is not uniformly
strong, so there is uncertainty about when they could stop
easing," he added.
Financial markets are buzzing with speculation that the U.S.
Federal Reserve will begin winding down its asset-purchasing
programme, known as "QE3", or quantitative easing, which is
tantamount to printing money.
That anticipation has contributed to the dollar's strength
against traditional safe havens such as the yen and the Swiss
franc, which has dropped 3.8 percent this month
against the greenback.
The Aussie, meanwhile, has lost 4.5 percent this
month, exacerbated by a surprise rate cut from the central bank,
while the Kiwi has dropped 3.6 percent.
On Thursday, the Australian dollar gained 0.1 percent to
$0.9907, while the Kiwi gained 0.3 percent to $0.8260.
The dollar has jumped 17.8 percent against the yen this
year. If it manages to hold onto those gains for the remaining
seven months of the year it would mark its best year since 1979,
when it gained 23.7 percent against its Japanese counterpart.
Barclays said in a report that most of the dollar's spurts
against the yen have taken place outside of Asian trading hours,
suggesting that local players are not the major drivers of yen
The euro was steady at $1.2889 following a beating on
Wednesday after data showed France had slipped into
recession, while Germany's rate of growth was unable to prevent
the euro zone economy from contracting for a sixth consecutive
The news pushed the common currency down to $1.2642 on
Wednesday, its lowest since April 4.
Analysts say that the euro would suffer a broad sell-off if
the European Central Bank took the deposit rate to below zero,
as officials have hinted they could do if the economy slows
further, meaning depositors would be charged to park their funds
in the bank.