Dollar stabilises, Asia shares slip

By Susan Fenton

HONG KONG (Reuters) - The dollar stabilised in early trade on Tuesday after losing ground in New York, while Asian shares slipped as investors shrugged off upbeat U.S. home sale data and took a breather after recent gains.

The dollar recovered ground as investors in Asia grew more cautious ahead of a string of U.S. economic data this week and the start of the Christmas shopping season on Friday after the U.S. Thanksgiving holiday, which will be a key test of consumer confidence.

The dollar was up 0.2 percent against a basket of major currencies after falling in New York where the market took comments by U.S. Federal Reserve official James Bullard on Sunday as further evidence the U.S. would maintain its very low interest rate policy for some time.

Dealers in Tokyo said some investors on Tuesday were closing dollar short-positions ahead of the Thanksgiving holiday.

Asian shares slid despite a solid performance on Wall Street, where the Dow Jones rose 1.3 percent as data showed existing home sales reached their highest level in two-and-a-half years.

The MSCI index of Asia Pacific stocks traded outside Japan was down 0.4 percent but it has already rallied 66 percent this year, leading some investors to question whether economic data is strong enough to justify further gains at this stage.

Revised third-quarter U.S. GDP data and a U.S. consumer confidence report later on Tuesday will give more clues on the strength of the world's largest economy.

Sales at U.S. retailers on Friday after the holiday could yield vital clues to the recovery power of American consumers, whose spending accounts for more than two-thirds of the economy. They could also signal whether Asian exporters can expect a rush of late orders before Christmas.