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Asia: Markets climb, dollar dips after US figures

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[HONG KONG] Asian markets climbed on Tuesday, while the US dollar struggled to recover from losses against its main peers following mixed readings on the US economy.

The gains came despite a negative lead from New York and Europe, where traders are awaiting key events this week, including Chinese growth data, the last presidential debate and a European Central Bank policy meeting.

A below-par reading on Monday on manufacturing in New York offset news that overall factory production grew for the third time in four months.

While investors globally expect US interest rates will rise by the end of the year, the figures tempered expectations for future hikes.

Federal Reserve Vice Chairman Stanley Fischer warned that interest rates would likely be suppressed by several factors including weak economic growth at home and abroad and low corporate investment.

The comments added to downward pressure on the dollar, which fell against the yen, euro and even the pound in New York, and continued to struggle in Asia on Tuesday.

However, regional stock markets rallied. Tokyo ended the morning 0.1 per cent higher as dealers brushed off a stronger yen, which hits exporters.

Hong Kong was one per cent higher, Shanghai added 0.1 per cent, Sydney gained 0.5 per cent and Seoul put on 0.2 per cent. Singapore, Taipei and Manila also recorded healthy gains.

"We're likely to see some choppy trading until we get some of these risk events out of the way, such as the last US presidential debate," James Woods, an analyst at Rivkin Securities in Sydney, told Bloomberg News. "Momentum seems to be building up for a December rate hike by the Fed."

Attention is now on the release on Wednesday of Chinese third-quarter economic growth figures, with an AFP survey predicting a slowdown from the previous three months.

The figures will be closely watched after last week's disappointing trade results were tempered by a better-than-expected inflation reading.

They will be followed later in the day by the third US debate in a bitter presidential election campaign, while the ECB holds a policy meeting on Thursday.

ECB chief Mario Draghi will be under pressure to clarify the bank's plans after investors were spooked by talk of an end to its stimulus programme.