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Dollar firmer

in late Tokyo trade

TOKYO: The dollar was firmer by late Tokyo but its movements were sluggish as the overnight fervour caused by a German rate cut and surprisingly weak U.S. economic data cooled down, dealers said.

The Bundesbank's decision on Thursday to cut its key rates led to some buying of marks for yen, but the overall reaction in Tokyo was somewhat more muted than expected, they added.

"After the flurry of selling and buying last night, it was really quiet today," said a trust bank dealer.

Dealers said that while the German rate cut was a supportive factor for the dollar, its effect was offset by the weaker-than-expected U.S. July durable goods figure.

They added that the dollar's topside was gradually becoming capped, especially against the yen, in the absence of other dollar-positive factors.

Its moves against the yen continued to be sandwiched between exporter offers at around 97 yen and buying interest by importers and life insurers on the downside.

Afternoon activity was limited to short-covering of dollars against the yen, and the U.S. currency remained dormant against the mark, dealers said.

"It recovered slightly in Asia because the selling was a bit overdone overnight," said a U.S. bank dealer in Singapore.

During morning trade, the dollar was largely powered by movements of the mark against the yen, rising against the yen in tandem with the mark's gains, dealers said.

A Singapore dealer said some U.S. funds were buying the dollar at 1.4775 marks earlier today, but other dealers said it looks heavy at 1.4820 marks as profit-taking is expected.-Reuter