Credit: Investing.com - The dollar eased back from six-month highs against the yen on Tuesday, as market participants began to look ahead to next week's Federal Reserve meeting amid a dearth of economic data.
During U.S. morning trade, USD/JPY was down 0.30% to 102.95 after rising as high as 130.39 earlier, the loftiest level since May 23.
The dollar softened amid uncertainty over whether the Federal Reserve will start rolling back its stimulus program as soon as next week. The latest U.S. nonfarm payrolls report showed that the economy added more jobs than expected in November, pushing the unemployment rate down to a five year low of 7.0%.
On Monday, St. Louis Fed President James Bullard said the prospect of tapering was more likely in the near future due to improvement in the labor market.
Elsewhere, the euro was steady close to six week highs against the dollar. EUR/USD rose to highs of 1.3795, the strongest level since October 29 and was last up 0.20% to 1.3765.
The euro has gained ground against the dollar and the yen since the European Central Bank held back from implementing fresh monetary easing at its December meeting, after surprising investors with a rate cut in November.
In a speech on Tuesday, ECB President Mario Draghi urged governments to complete a banking union, saying it was crucial at both a national and European level.
The pound rose to highs of 1.6466, the strongest level in 27 months, and was last down 0.02% to 1.6423.
Demand for the pound continued to be underpinned after Bank of England Governor Mark Carney said Monday the U.K. economy had regained considerable strength in recent months. The comments came during a speech in New York.
Sterling received an additional boost after data on Tuesday showing that U.K. industrial output rose strongly in October added to indications that the recovery is gaining traction and fuelled hopes that the BoE may tighten monetary policy ahead of other central banks.
A separate report showed that the U.K. trade deficit shrank less than expected in October.
The dollar fell to session lows against the Swiss franc, with USD/CHF down 0.34% to 0.8873.
The greenback turned lower against the Australian, New Zealand and Canadian dollars, with AUD/USD rising 0.33% to 0.9139, NZD/USD climbing 0.28% to 0.8304 and USD/CAD dipping 0.07% to 1.0618.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.22% to 79.99.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
