Dollar off highs vs Yen

The dollar pulled back from six-month highs against the yen on Tuesday, and the euro remained higher against the dollar, shrugging off dovish comments by a senior European Central Bank official.

During European morning trade, USD/JPY slid 0.29% to 101.37, after rising as high as 101.91 on Monday, the highest since late May.

The yen found support after Tuesday’s minutes of the Bank of Japan’s October meeting showed some policymakers see a greater downside risk to the economy.

The BoJ noted that the economy is following the path to the bank’s 2% inflation target at a moderate pace. The members also said that there remains a high degree of uncertainty over the medium to long term inflation outlook.

Elsewhere, EUR/USD was up 0.29% to 1.3555 from 1.3515 on Monday. The euro shrugged off remarks by ECB board member Benoit Coeure, who said that negative deposit rates are still a possibility.

The pound was also higher against the dollar, with GBP/USD rising 0.21% to 1.6188 ahead of testimony by Bank of England Governor Mark Carney on the bank’s inflation report before the U.K. Treasury select committee.

The dollar was down against the Swiss franc, with USD/CHF losing 0.40% to trade at 0.9080.

The greenback was little changed against the Australian, New Zealand and Canadian dollars, with AUD/USD slipping 0.09% to 0.9152, NZD/USD edging up 0.07% to 0.8212 and USD/CAD inching up 0.09% to 1.0551.

Australia’s dollar remained supported after Reserve Bank Deputy Governor Philip Lowe said Tuesday that intervention to weaken the currency is an option, but added that the threshold for intervention is high.

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.28% to 80.73.


Copyright © 2012 Forex Affairs