Dollar mixed in Europe while Asia central banks support local currencies (AP) (27-05-2008)

The U.S. dollar was trading in a narrow range on Monday against other major currencies in Europe, although volume was thin as U.S. financial markets were closed for the Memorial Day holiday.

The euro slipped to $1.5772 from $1.5775 it bought late Friday in New York.

When trading opened in Asia, local central banks took action to boost falling currencies on Tuesday to help prevent surging oil prices from stoking inflation in economies bracing for a global slowdown.

Central banks in Indonesia, the Philippines, South Korea and Taiwan were spotted selling dollars to support their currencies under pressure from inflation fears and wobbly stock markets, currency traders said.

Asian central banks have traditionally intervened to prevent the currency appreciation which would hurt exports, the main driver of growth for most of the region's economies.

But the focus of policy in some countries is now shifting to containing inflation with oil prices at record highs above $130 a barrel driving up costs across the economy and fuelling demands for higher wages.

  Source AP