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Forex - US dollar firmer in quiet, rangebound Asian morning trade
TOKYO (Thomson Financial) - The US dollar was firmer against other major currencies in Asian morning trading Monday, continuing its rebound late last week, but was held within narrow ranges, with Asian players unwilling to move the market because of a lack of fresh trading leads and in the absence of players from further afield because of public holidays.

At 9.41 am (0041 GMT) in Tokyo, the dollar was at 99.77 yen, compared to 99.56-99.66 yen in late trading in New York last week. The euro was at 1.5403 dollars, compared to 1.5426-1.5436 dollars in New York.

The US currency was well bid after a survey showed last week that Philadelphia-area manufacturing activity was not as weak as expected and commodity prices continued to fall.

The Federal Reserve Bank of Philadelphia said its Philly Fed manufacturing index improved to minus 17.4 in March from minus 24.0 in February. The median estimate for this month among economists surveyed by IFR Markets was minus 20.0.

But investors are now awaiting more US economic data, including the release later today of the National Association of Realtors existing home sales figures and the S&P/Case-Shiller home price indices on Tuesday.

"The recent rebound of the dollar reflected partly the market's view that the credit crunch might have passed through its very worst phase following the bailout of Bear Stearns by JP Morgan," said Ryohei Muramatsu, head of Group Treasury Asia at Commerzbank in Tokyo.

"But it would still be premature to judge that last week's movement signals a fully fledged rebound of the dollar, because the rise seems to have been the result of active position-adjustment ahead of the long Easter holiday break," he said.

But John Noonan of Thomson/IFR Markets thinks last week's price action in all of the asset markets was extraordinary, and could mean a sea change for the correlations that drive the forex market.

"For months and months this would correlate with the Australian dollar, New Zealand dollar and Canadian dollar gaining at the expense of the yen, as investor enthusiasm would spill over to carry-trade demand," Noonan said.

"Last week the Australian dollar, New Zealand dollar and Canadian dollar fell between 2 percent and 3 percent against the yen, suggesting that correlations are changing, and radically so," he said.

Wall Street staged a strong rally last week and the Dow Jones Industrial Average ended the week up around 3.5 percent.

The New York Mercantile Exchange's benchmark oil futures contract dipped briefly below 100 US dollar per barrel level last week.