TOKYO- The US dollar was subdued on Tuesday as investors looked to US inflation data due later in the week after softer-than-expected jobs data quelled expectations of an early tapering in the Federal Reserve’s stimulus.
The euro fetched $1.21915, bouncing back from its three-week low of $1.2104 set on Friday while the dollar eased to 109.26 yen, losing steam after having hit a two-month high of 110.325 late last week.
The dollar’s index against a basket of six major currencies stood at 90.021, not far from 89.533, a 4 1/2-month low touched late last month.
“It’s not that the payrolls numbers were weak. But because so much expectation had been build up in advance, the dollar suffered a bit of setback,” said Shinichiro Kadota, senior currency strategist at Barclays.
Friday’s jobs data, which showed US non-farm payrolls increasing by 559,000 in May, fell 90,000 jobs short of expectations.
The data helped to pin down US bond yields near their recent lows, weighing on the dollar, while investors now looked to consumer price data on Thursday for fresh direction.
Many investors now expect the Fed to unveil a plan to reduce its bond purchase later this year, and actual tapering to start early next year.
The British pound hardly budged at $1.4169 while the Australian dollar was unchanged at $0.7753, both stuck in ranges seen over the past couple of months.
