Investing.com - The dollar fell to session lows against the yen on Tuesday and the euro fell to fresh session lows as investors positioned ahead of Wednesday’s outcome of the Federal Reserve’s final policy meeting of the year.
During U.S. morning trade, USD/JPY hit session lows of 102.68, down from Friday’s five year highs of 103.91, and was last down 0.31% to 102.63.
Investors remained cautious amid ongoing uncertainty over whether the U.S. central bank will announce a small reduction in the pace of its USD85 billion-a-month asset purchase program.
The dollar showed little reaction after the Department of Labor said U.S. consumer prices were flat in November after falling 0.1% in October.
The annual rate of inflation rose 1.2% in November, undershooting expectations for an increase of 1.3%, but was up from a four year low of 1.0% in October.
EUR/USD fell to session lows of 1.3723 and was last down 0.20% to 1.3733.
The drop in the euro came despite data on Tuesday showing that the ZEW index of German economic sentiment rose to 62.0 in December from November’s reading of 54.6. It was the highest level since April 2006. Economists had expected the index to tick up to 55.0 this month.
The data came one day after a report showed that manufacturing activity in Germany rose to a 30 month high in November, bolstering the outlook for the recovery in the euro zone.
The pound extended losses against the dollar, with GBP/USD down 0.40% to 1.6233.
Earlier Tuesday, data showed that the annual rate of inflation in the U.K. fell to a four year low of 2.1% in November, easing pressure on the Bank of England to tighten monetary policy.
The dollar was trading close to two year lows against the Swiss franc, with USD/CHF easing up 0.11% to 0.8880, holding above the lows of 0.8839 struck last Wednesday.
Elsewhere, the Australian dollar fell to four-month lows against the U.S. dollar, with AUD/USD falling 0.62% to 0.8890.
The minutes of the Reserve Bank of Australia’s December meeting did not rule out the possibility of further rate cuts on Tuesday, but said it was important to first see the effects of earlier cuts.
The U.S. dollar pushed higher against its New Zealand and Canadian counterparts, with NZD/USD slipping 0.13% to 0.8246 and USD/CAD inching up 0.07% to 1.0602.
Canadian manufacturing sales rose 1.0% in October, data on Tuesday showed, defying expectations for a 0.2% decline.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.14% to 80.35.
During U.S. morning trade, USD/JPY hit session lows of 102.68, down from Friday’s five year highs of 103.91, and was last down 0.31% to 102.63.
Investors remained cautious amid ongoing uncertainty over whether the U.S. central bank will announce a small reduction in the pace of its USD85 billion-a-month asset purchase program.
The dollar showed little reaction after the Department of Labor said U.S. consumer prices were flat in November after falling 0.1% in October.
The annual rate of inflation rose 1.2% in November, undershooting expectations for an increase of 1.3%, but was up from a four year low of 1.0% in October.
EUR/USD fell to session lows of 1.3723 and was last down 0.20% to 1.3733.
The drop in the euro came despite data on Tuesday showing that the ZEW index of German economic sentiment rose to 62.0 in December from November’s reading of 54.6. It was the highest level since April 2006. Economists had expected the index to tick up to 55.0 this month.
The data came one day after a report showed that manufacturing activity in Germany rose to a 30 month high in November, bolstering the outlook for the recovery in the euro zone.
The pound extended losses against the dollar, with GBP/USD down 0.40% to 1.6233.
Earlier Tuesday, data showed that the annual rate of inflation in the U.K. fell to a four year low of 2.1% in November, easing pressure on the Bank of England to tighten monetary policy.
The dollar was trading close to two year lows against the Swiss franc, with USD/CHF easing up 0.11% to 0.8880, holding above the lows of 0.8839 struck last Wednesday.
Elsewhere, the Australian dollar fell to four-month lows against the U.S. dollar, with AUD/USD falling 0.62% to 0.8890.
The minutes of the Reserve Bank of Australia’s December meeting did not rule out the possibility of further rate cuts on Tuesday, but said it was important to first see the effects of earlier cuts.
The U.S. dollar pushed higher against its New Zealand and Canadian counterparts, with NZD/USD slipping 0.13% to 0.8246 and USD/CAD inching up 0.07% to 1.0602.
Canadian manufacturing sales rose 1.0% in October, data on Tuesday showed, defying expectations for a 0.2% decline.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.14% to 80.35.