Investing.com - The dollar rose against the yen on Tuesday after falling to fresh two-month lows overnight amid concerns over a crisis in emerging markets, while the pound and the Australian dollar strengthened against the greenback.
USD/JPY was up 0.31% to 101.29, recovering from two-month lows of 100.76.
The yen strengthened overnight after Japan’s Nikkei posted its largest one-day decline since June, falling 4.2%, as weak U.S. manufacturing data reinforced negative investor sentiment in the wake of a broad based selloff in emerging markets.
The Institute for Supply Management said manufacturing index fell to a seven-month low in January, as new orders slumped.
The data sparked concerns over the outlook for the recovery, ahead of Friday’s U.S. jobs report for January, after December’s report showed that the economy added far fewer jobs than expected.
Elsewhere, the pound was higher against the dollar, with GBP/USD up 0.21% to 1.6337, recovering from six-week lows of 1.6258.
Sterling was boosted after date released on Tuesday showed that construction output in the U.K. rose at the fastest rate since August 2007 in January, indicating that the economic recovery is continuing.
EUR/USD dipped 0.07% to 1.3517. In the euro zone, data on Tuesday showed that the number of people unemployed in Spain rose by 113,097 in January, ending three months of declines, pushing the total out of work to 4,814,435.
The dollar was higher against the Swiss franc, with USD/CHF up 0.37% to 0.9040.
The Australian dollar rallied, with AUD/USD up 1.50% to 0.8882 after the Reserve Bank of Australia shifted its policy stance away from easing rates, citing higher than forecast inflation at its latest policy meeting.
The RBA left rates on hold at 2.5%, saying “the most prudent course is likely to be a period of stability in interest rates."
The New Zealand dollar was also higher, tracking gains in Australia’s dollar, with NZD/USD up 0.82% to 0.8151.
The U.S. dollar was lower against the Canadian dollar, with USD/CAD down 0.22% to 1.1092.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up 0.10% to 81.21.