SINGAPORE- The dollar and yen eased on Tuesday, paring some of their safe-haven gains from the start of the week in the wake of a major missile exchange between Israel and Hezbollah that stoked fears of a wider escalation.
Imminent US rate cuts also remained at the top of investors’ minds and further pressured the greenback, though currencies were mostly rangebound on the lack of major news in the Asian session.
The yen was last 0.1 percent lower at 144.65 per dollar, having risen to a three-week high of 143.45 in the previous session on a flight to safety.
The euro and sterling rose about 0.1 percent each to $1.1172 and $1.3201 respectively, hovering near their recent multi-month highs.
The Canadian dollar strengthened slightly to 1.34875 per US dollar, having touched a five-month peak on Monday as oil prices surged.
“The market is sort of taking a breather and waiting to see key data releases,” said Rodrigo Catril, senior FX strategist at National Australia Bank.
“Given also that we have kind of second-tier data releases this week, it plays to the view of a sort of more range-y environment over the near term.”
Most currencies were holding near milestone highs and the dollar near its lowest level in more than a year, helped by the likelihood of a US rate cut in September after Federal Reserve Chair Jerome Powell more or less nodded to such a move in his Jackson Hole speech on Friday.
San Francisco Fed President Mary Daly also said on Monday a quarter-percentage point reduction in borrowing costs next month was likely.
Against a basket of currencies, the greenback dipped 0.03 percent to 100.82, languishing near a 13-month low of 100.53 hit in the previous session.
