The dollar slipped lower against the yen and the euro on Tuesday, as investors looked to U.S. economic reports later in the session for further signs on the strength of the recovery.
Dollar slides before U.S. data on housing, confidence
USD/JPY was down 0.15% to 102.35, holding below the three-week high of 102.82 struck on Friday.
Investors remained cautious after a recent series of disappointing U.S. economic indicators, including reports on jobs growth, retail sales and housing sparked concerns that the economic recovery has lost momentum since the end of last year.
Demand for the safe haven yen was boosted as China’s yuan fell sharply on Tuesday, amid speculation that the country’s central bank had intervened to add volatility to the currency ahead of possible reforms.
EUR/USD rose to session highs of 1.3773 and was last up 0.07% to 1.3744.
Earlier Tuesday, official data confirmed that Germany’s economy grew 0.4% in the fourth quarter and expanded 1.3% on a year-over-year basis as strong overseas demand bolstered exports.
The euro remained under some pressure amid lingering concerns that the European Central Bank may tighten monetary policy to stave off the risk of deflation in the euro area.
The annual rate of euro zone inflation came in at 0.8% in January, data on Monday showed, slightly higher than the preliminary estimate for 0.7%, but still well below the ECB’s target of 2% inflation.
Sterling was boosted after data from the British Bankers Association showed that mortgage approvals rose 57% in January from a year earlier, hitting a 76-month high.
Elsewhere, the Australian dollar was lower, with AUD/USD down 0.22% to trade at 0.9016, while NZD/USD slid 0.10% to 0.8323.
The U.S. dollar pushed higher against the Canadian dollar, withUSD/CAD rising 0.14% to 1.1075.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, slipped 0.10% to 80.16.
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