TOKYO Jan 5 The dollar stepped further away
from a 14-year peak against a basket of currencies on Thursday,
as investors locked in gains from its two-month-old rally since
Donald Trump won the U.S. presidential election.
The dollar had soared following the election on Trump's
plans to cut taxes, boost fiscal spending and protectionist
trade rhetoric, all seen as inflationary and lifting U.S. bond
But looming uncertainty on exactly what his presidency will
be like is prompting some players to take off their bets on the
dollar for now, as his inauguration nears, with many market
players focusing on his news conference next Wednesday.
The dollar's index against a basket of six major currencies
slipped to 102.20 after having hit a 14-year high
of 103.82 on Tuesday, when a strong reading from a U.S.
manufacturing survey boosted the U.S. currency.
The euro rose to $1.0524, having recovered from a
14-year low of $1.0340 touched on Tuesday.
The common currency was helped at the margin by data showing
euro zone prices rose faster than expected in December and
surveys suggesting business growth reached its highest in more
than five years.
The dollar slipped to 116.70 yen after having peaked
at 118.605 on Tuesday, just shy of its 10-1/2-month high of
118.66 touched on Dec. 15.
Some traders noted that there may have been selling by
Japanese exporters after their New Year holidays.
The Australian dollar hit a two-week high of
"Recent economic data is pretty good so markets are on
risk-on mode overall and the dollar is supported. But U.S. bond
yields are being capped so the dollar is losing its driver to
rally," said Yukio Ishizuki, currency strategist at Daiwa
U.S. bond yields edged down on Wednesday, with the 30-year
yield hitting a four-week low on Wednesday, even as the minutes
from the Fed's last policy meeting showed almost all Federal
Reserve policymakers thought the economy could grow more quickly
because of fiscal stimulus under the Trump administration.
The Chinese yuan slipped a tad after it made its biggest
daily gain in about a year in offshore trade on Wednesday, as
Chinese authorities took steps to shore up the currency.
The Thomson Reuters/Hong Kong Exchange index of the offshore
yuan hit its highest level in almost six months, though
the index for onshore yuan still stood within its ranges
of the past few weeks.
The offshore yuan gained 1.3 percent on Wednesday,
hitting a one-month high of 6.8658 per dollar. It last stood at
"The price action was pretty big. I suspect it was propelled
by unwinding of those who had made big bets against the yuan on
speculation that capital outflows will continue under a strong
dollar," Daiwa's Ishizuki said.
(Editing by Jacqueline Wong)