Dollar down in Asian trade

The dollar fell in Asia Monday after a report revealed a decline in US wages that could dampen consumer spending and delay an interest rate increase.

The euro was at $1.1856 in afternoon Singapore trade, up from $1.1842 in New York late Friday, while it was also at 140.04 yen from 140.29 yen. The dollar dipped to 118.13 yen from 118.46 yen.

Japanese financial markets were closed for a public holiday.

The US government on Friday reported that the economy added a solid 252,000 jobs in December, while unemployment dropped to 5.6 percent from 5.8 percent in November.

However, hourly earnings, a sign of the economy's strength, fell back, almost totally reversing the previous month's gain. Hourly earnings were up just 1.7 percent from a year ago, just keeping up with inflation.

Analysts said investors focused on the hourly earnings fall because of its impact on consumption.

"The broader picture remains unchanged," DBS Bank said in a commentary.

"There has been essentially zero real wage growth for the past two years, suggesting much slack remains in labour markets and raising more doubt about an official unemployment rate that has fallen to 5.6 percent from 8.0 percent on the same two-year time frame."

Analysts took the report as allowing the Fed to hold off hiking interest rates too soon, denting speculation of an increase in April and making the dollar less attractive to investors.

"Despite the robust US jobs data, markets chose to focus on the weak wages growth and the likelihood that it will keep the Fed Reserve 'patient' about any rate hike," United Overseas Bank said.

Investors were also looking ahead to a meeting of the European Central Bank's governing council on January 22 for some clues on its intention to launch a quantitative easing (QE) programme of purchasing government bonds like the US Federal Reserve did during the global financial crisis to protect the eurozone from deflation.

"The main interest now is what size QE may take," banking group ANZ said.

"We expect sovereign bond purchases need to be at least 500 billion euros and probably closer to 750 billion euros to convince the market that the ECB's balance sheet policy will be credible," it said.

And eyes will be on the Greek snap election on January 25 in the face of fears that a win by far-left Syriza party could lead to the country exiting the eurozone.

The dollar retreated against key Asia Pacific currencies.

It fell to 62.17 Indian rupees from 62.35 on Friday, to 12,540 Indonesian rupiah from 12,636, to Sg$1.3315 from Sg$1.3358 and to 44.8550 Philippine pesos from 44.96.

The dollar also eased to Tw$31.8430 from Tw$31.940 and to 32.8290 Thai baht from 32.860

The Australian dollar rose to 82.47 US cents from 81.38 US cents. The Chinese yuan dipped to 19.0577 yen from 19.21.