US Dollar Mixed

Forex - US dollar mixed early in Asian session as new leads awaited

SYDNEY (Thomson Financial) - The US dollar was softer against the yen but firmer against the euro early in Asian trading hours Thursday as financial markets around the world remained focussed on the sub-prime mortgage problems in the US, despite the mild rebound on Wall St Wednesday.

The mixed messages from economic data in the US and Europe are leaving traders with little alternative but to sit on the sidelines to wait for stronger new leads or further fallout from US stockmarkets.

At 10.15 am here (0015 GMT), the dollar was at 118.73 yen, down from 118.96 yen in late trading in New York Wednesday. The euro was at 1.3660 dollars, down from 1.3668 dollars in New York.

The greenback had been hurt in New York trading by the latest US ADP employment survey, which showed a gain of just 48,000 in July, possibly indicating a weaker non-farm payrolls report Friday. Commonwealth Bank senior economist Michael Workman said the ADP report was not a reliable indicator of payrolls in recent months and did not include government employment.

The US Institute for Supply Management's manufacturing index fell to 53.8 index points in July from 56.0 in June. Analysts said the survey did not alter the prospect of moderate expansion continuing in the US manufacturing sector.

US pending home sales jumped 5.0 percent in July, the market having expected a drop of 0.5 percent, following the fall of 3.7 percent in June.

'It was the first month in four to record positive growth and provided a welcome break from the continued run of excruciatingly weak US housing data of late, amid ongoing bad news on the sub-prime front,' Workman said.

'The July upside in pending sales signals the prospect of a rebound in existing home sales in July after three consecutive monthly falls.'

Comments by US Treasury Secretary Henry Paulson also supported the greenback. He said the US domestic economy was strong enough to weather the recent sell-offs in financial markets.