| NEW YORK
NEW YORK The dollar shook off early weakness against the yen on Monday after U.S. Treasury Secretary Steven Mnuchin said a strong dollar would be a good thing over a long period, but the greenback remained subdued against a basket of currencies amid geopolitical tensions.
Against the yen, the U.S. dollar rose to session high of 109.05 after the Financial Times quoted Mnuchin playing down President Donald Trump's interview with the Wall Street Journal last week where Trump said the dollar was "getting too strong."
"In an otherwise quiet session, the comments from the Treasury secretary may be giving the dollar a little bit of a leg to stand on," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
Earlier in the session the greenback retreated to 108.14 yen, its lowest since mid-November as rising tensions over North Korea stoked demand for the safe-haven Japanese currency.
"I think we started out in a risk-off mode but then that's been unwinding in a more risk favourable way," said Vassili Serebriakov, foreign exchange strategist at Credit Agricole in New York.
The dollar index, which measures the greenback against a basket of six major currencies, was down 0.23 percent at 100.33.
Tensions on the Korean peninsula have escalated as Trump takes a hard rhetorical line with North Korean leader Kim Jong Un, who has rebuffed admonitions from China and proceeded with missile tests.
North Korea launched a ballistic missile on Sunday but it blew up almost immediately.
With many of Europe's largest trading hubs closed for the Easter holiday, trading was quiet. The market has yet to fully react to weak U.S. economic data out on Friday, Serebriakov said.
U.S. retail sales fell for a second straight month in March and consumer prices dropped for the first time in just over a year, underscoring the magnitude of the loss of economic growth momentum in the first quarter.
"We might see a little bit more reaction on Tuesday as Europe comes back, so I wouldn't get excited about the dollar rebound that we are seeing intraday today," Serebriakov said.
The Turkish lira was up about a percent against the dollar after having rallied over 2 percent against the greenback after President Tayyip Erdogan won a narrow victory in a referendum granting him sweeping powers.
(Reporting by Saqib Iqbal Ahmed; Editing by Lisa Shumaker)