Dollar up in Asia as Fed set to wrap up meeting

The dollar rose on Wednesday as traders eye a Federal Reserve policy meeting, which wraps up later in the day, after the unit dropped on mixed US economic data. In midday Tokyo trading, the greenback fetched 118.09 yen, up from 117.90 yen in US trade.

The euro slipped to $1.1338 and 133.87 yen, from $1.1380 and 134.19 yen in New York, with traders keeping their eyes on Europe as Greece s new anti-austerity government prepares to face off with its international creditors over its bailout.

The troubled euro -- which hit a more than 11-year low below $1.10 on Monday -jumped above $1.14 at one point in US trade before easing slightly. Dollar sentiment took a hit as US durable goods orders unexpectedly tumbled 3.4 percent in December, reminding investors that the world s top economy still has weak spots, especially its exposure to the global economic slowdown.

A Conference Board report that showed US consumer confidence jumped in January to its highest level in more than seven years was unable to lift the mood. "It is remarkable how much impact this single weak report has had," National Australia Bank said, referring to the durable goods figures published Tuesday.

"This sharp reaction says much about market positioning. The long USD camp has continued to grow (for good reason), but some of the weaker followers are susceptible to being shaken out easily. "Signs of a more cautious Fed... would cause even more of them to run." The bank added that "any upgraded notes of concern from the Fed about soft inflation, weakness in trading partners, or the stronger USD would likely be taken as a dovish signal". The Fed is not expected to make any significant decisions, but could refine its signals for a planned rate hike expected around mid-year. In other trading, the US dollar surged to Sg$1.3569 at one stage, its highest since August 2010 and well up from Sg$1.3441 on Tuesday, after Singapore s central bank unexpectedly eased its currency policy, as it pointed to a weaker inflation outlook. The Australian dollar briefly climbed above 80 US cents, before easing back to 79.90 US cents after official figures showed the country s inflation rate has accelerated. The Aussie bought 79.38 US cents on Tuesday.