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US dollar comes off 2-week lows, slight easing in risk aversion checks yen
[TOKYO] The dollar was buoyant on Wednesday, having rebounded from two-week lows against its rivals as the yen sagged on easing risk aversion.
The dollar index against a basket of six major currencies was steady at 94.663 after gaining 0.4 per cent overnight to snap a four-session losing run.
The index had fallen to its lowest since June 14 earlier on Tuesday amid concerns over an escalating trade row between the United States and its trade partners, notably China.
While the trade conflict is expected to remain a long-running theme dogging the financial markets, a modest easing in concerns helped partially revive risk appetite.
The dollar was 0.1 per cent higher at 110.11 yen, after going as low as 109.37 earlier on Tuesday. The yen is often sought in times of market turmoil and political tensions.
Still, the dollar was expected to remain listless amid uncertainty over US policy.
"The dollar lacks guidance from US yields, which have been directionless. Furthermore, it is difficult to gauge whether the Trump administration is poised to become even more conservative towards trade issues or if it wants to ease its stance," said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.
For now the dollar also managed to benefit from the flagging euro and pound.
The euro was little changed at US$1.1650 after losing 0.5 per cent overnight, when a rise in Italian bond yields ahead of debt auctions later this week soured sentiment towards the single currency.
The pound lost 0.45 per cent on Tuesday after an incoming Bank of England policymaker expressed caution over Britain's readiness for higher interest rates and uncertainty over the impact of Brexit on the economy.
Sterling was last flat at US$1.3224.
The Australian dollar was effectively unchanged at US$0.7391 , stabilising amid the ebb in risk aversion after dropping 0.3 per cent overnight.