SYDNEY (Reuters) - The dollar was broadly firmer early in Asia on Tuesday, with the yen on the backfoot after upbeat data suggested the world’s biggest economy will accelerate in 2011.
The Australian dollar, however, came under pressure with traders citing worries about the massive floods in the country’s northeast, which has severed roads and closed ports, curtailing production of coal, Australia’s top export.
The Aussie fell to $1.0155, retreating from a 28-year peak around $1.0257 set on Friday. First support is seen around $1.0150 and then $1.0108.
“The flood has claimed several lives, while damage to infrastructure ... will be a hit to export revenues,” said Sue Trinh, currency strategist at RBC Capital Markets.
Some traders said they wouldn’t be surprised to see a retest of parity in the short-term.
Still, while export volumes could be hit in the short term, that has in turn boosted prices for several commodities including coal and wheat, lessening the impact on the economy.
The greenback perked up after data showed U.S. manufacturing grew at its fastest clip in seven months in December, and construction spending hit a five-month high in November.
With mounting evidence the U.S. recovery will gather steam this year, some analysts expect the dollar to gain some traction in the months ahead. The upbeat view helped drive U.S. stocks .SPX to fresh two-year highs on Monday.
The dollar was last at 81.73 yen, having bounced off a low of 80.94 set on Monday and halting a three-day slide in the closing days of 2010. Resistance is at around 82.34 with sell orders seen above 82.00.
Against the Swiss franc, it was at 0.9336, off an all-time low just above 0.9300 set last Friday.
The euro fetched $1.3342, retreating slightly from the overnight high near $1.3400.
The dollar index, which tracks the greenback’s performance against a basket of major currencies, edged up 0.2 percent to 79.235 .DXY, eyeing resistance at around 79.500.
“At the moment, I still favor selling any rallies in the euro and the Aussie, although the Aussie is more a short-term view,” a trader at a U.S. investment bank said.
“We had strong equities overnight and the Aussie hasn’t been able to rally on the back of the risk appetite. I think the flood worry might play out a bit further.”
Liquidity, however, is still lacking with many players away on holidays, leaving the market vulnerable to big whippy moves.
All eyes are on the influential U.S. jobs data due on Friday. Analysts polled by Reuters expect the economy to have generated 140,000 jobs in December, taking the jobless rate down to 9.7 percent from 9.8 percent.
Better-than-expected news on the labor market could help further shore up the dollar.
Editing by Wayne Cole