On Wednesday, the dollar rose against the yen amid improving risk appetite as concerns over trade friction between the U.S. and China and tensions in the Middle East subsided.
At 03:21 AM ET (07:21 AM GMT), USD/JPY was up 0.3% to 107.33, pulling away from Tuesday’s lows of 106.87.
Stronger market sentiment soused demand for the safe haven Japanese currency, which is often sought in times of market turmoil and political tensions.
The measure of the greenback’s strength against a basket of six major currencies, which is U.S. dollar index, was up 0.17% to 89.36 after touching a three week low of 88.95 on Tuesday.
As market focus turned back to economic fundamentals as fears over tensions in Syria and a simmering U.S.-China trade spat receded, the dollar was supported by solid U.S. economic reports .
“U.S. housing starts rose more strongly than expected in March while industrial production was steady”, showed reports on Tuesday.
With EUR/USD slipping 0.12% to 1.2355, the euro was a touch lower against the dollar.
On Tuesday, the single currency had hit a three week high of 1.2412 against the dollar but turned lower after a report showing that German economic sentiment deteriorated sharply again in April amid concerns over heightened international trade tensions.
With GBP/USD dipping to 1.4276, the pound edged lower, pulling further back from a post Brexit 22-month high of 1.4376 hit on Tuesday.
The pound eased after softer than expected UK wage growth data but investors were still expecting the Bank of England to raise interest rates in May.
With USD/CAD rising 0.32% to 1.2592, the Canadian dollar was also weaker, backing away from the seven week lows set in the previous session ahead of the Bank of Canada’s monetary policy announcement later Wednesday.
While the BoC was not expected to raise rates expectations have been growing for a rate hike as soon as next month after recent strong economic data and investors will be looking for any hints that could support this view. /Investing.com