Investing.com - The dollar held onto gains against the other major currencies on Wednesday, geopolitical tensions eased and as investors turned their attention to upcoming U.S. economic reports.
The yen was weaker, with USD/JPY up 0.16% at 109.88, off the previous session's four-month low of 108.27, while USD/CHF held steady at 0.9559.
Safe-haven demand initially strengthened following North Korea's missile launch over on Monday.
But market sentiment improved as U.S. President Donald Trump's reaction to the North Korean aggression was seen as more moderate than in the past. The U.S. President did warn that "all options are on the table" however.
Investors turned their attention to upcoming reports on U.S. nonfarm employment and second-quarter growth due later Wednesday, for further indications on the strength of the economy.
EUR/USD slid 0.25% at 1.1942, off Tuesday's two-and-a-half year peak of 1.2069, while GBP/USD slipped 0.11% to 1.2906.
The single currency has been supported recently by hopes that the European Central Bank will soon announce plans to taper its bond-buying stimulus program.
Market participants were also focusing on the third round of Article 50 negotiations between the U.K. and the European Union, which began on Monday.
European Commission President Jean-Claude Juncker criticized the UK's Brexit negotiations this week, stating that the country had failed to answer "huge numbers of questions" on its plans.
The Australian dollar was stronger with AUD/USD up 0.09% at 0.7959, while NZD/USD edged down 0.12% to 0.7246.
The Australian Bureau of Statistics earlier reported that building approvals declined by only 1.7% in July, compared to expectations for a 5.0% drop.
A separate report showed that construction work done in Australia increased by 9.3% in the second quarter, beating expectations for a 1.0% gain.
The kiwi weakened after Reserve Bank of New Zealand Governor Graeme Wheeler said that a lower New Zealand dollar was needed to help boost the export sector and inflation.
Meanwhile, USD/CAD rose 0.20% to trade at 1.2536.
Traders were also gauging the economic impact of Tropical Storm Harvey, which has resulted in catastrophic flooding in Texas and knocked out almost nearly a quarter of the U.S's crude oil refining capacity.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.20% at 92.45 by 08:20 a.m. ET (12:20 GMT), off the previous session's two-and-a-half year trough of 91.55.