The pound led losses in the Group-of-10 currencies after Bank of England Chief Economist Huw Pill said that an interest-rate cut in the summer is in play.
GBP/USD drops as much as 0.4% to 1.2510; Pill said there is "still some work to do" to squeeze domestically generated inflation out of the UK.
The Bloomberg Dollar Spot Index climbs 0.1%, heading for a third day of gains, mainly supported by yen weakness, as traders await the releases of key US inflation indicators.
US headline producer price likely rose 0.3% in April versus 0.2% prior, while headline inflation for the same month was expected to stay at 0.4%, according to Bloomberg surveys.
USD/JPY rises 0.2% to 156.54, the highest since May 1; leveraged funds have been initiating long positions since the New York close after the pair rose above its May 2 high of 156.28 in the run-up to US PPI data due later Tuesday, according to Asia-based traders.
EUR/USD erases losses to trade little changed at 1.0790; one-week risk reversals are most bullish the pair since February as hedge funds unwind short exposure.
Source : Bloomberg
