-- Slew of important euro-zone and U.S. economic indicators eyed
By Kosaku Narioka
Of DOW JONES NEWSWIRES
TOKYO (Dow Jones)--The dollar stabilized versus the yen and the euro Thursday in Asia ahead of a slew of important euro-zone and U.S. economic indicators due later in the global day, as market participants digested the outcome of the European Central Bank's key operation and the U.S. Federal Reserve chairman's semiannual testimony on Wednesday.
The dollar rose sharply versus the yen on Wednesday after Fed Chairman Ben Bernanke appeared to be in no hurry to launch new policies aimed at boosting economic growth, prompting some participants to scale back expectations for a third round of quantitative easing.
But stability in the spot on Thursday suggested market players were now digesting Wednesday's developments and waiting for the release of the data before any attempts to push the dollar up further.
"As sound readings in U.S. economic indicators have continued lately, fundamentals tend to favor dollar-buying," said Mitsuru Sahara, chief manager of the foreign exchange sales department at Bank of Tokyo-Mitsubishi UFJ.
He added, though, that after the dollar's surge by about Y5 in February, "there is some sense of respite."
Among the data market participants will be closely watching are the euro-zone manufacturing purchasing managers' index and consumer price index, U.S. weekly jobless claims and PMI data from the Institute for Supply Management.
In its latest effort to contain European sovereign debt crisis, the ECB on Wednesday allotted EUR529.5 billion in cheap, three-year loans to 800 lenders in its second long-term refinancing operation. The euro fell versus the dollar following the outcome of the operation.
"Ultimately, the key is how much recovery the U.S. and the euro zone each can achieve," said Michiyoshi Kato, senior vice president of forex sales at Mizuho Corporate Bank. "Behind profit-taking in the euro overnight are concerns over the outlook of the euro zone."
The dollar was at Y80.99 as of 0450 GMT from Y81.14 late Wednesday in New York, according to EBS.
The euro was at $1.3339 from $1.3324 and at Y108.04 from Y108.13.
The dollar was at CHF0.9038 from CHF0.9044. The U.K. pound was at $1.5926 from $1.5907.
The ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at about 78.717 from 78.806.
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