The dollar nursed its sharpest drop in a month and a half on Wednesday, as investors bet that softer-than-expected U.S. jobs data reduced the chances of further Federal Reserve rate hikes.
The Japanese yen hovered around 146 per dollar following its overnight rebound from a 10-month trough at 147.375, as a drop in Treasury yields took away support for the U.S. currency.
The Australian dollar dropped from near a two-week peak after inflation there cooled by more than economists predicted in July.
China's yuan was buoyed above a 10-month low in offshore trading after the country's central bank again set a much stronger than anticipated official mid-point.
Cryptocurrency bitcoin eased back slightly after surging more than $2,000 in the previous session to hit a nearly two-week top at $28,142, following a court ruling that could pave the way for a first-of-its-kind spot bitcoin exchange traded fund.
The U.S. dollar index - which measures the currency against six developed-market peers including the yen and euro - was little changed at 103.57 after pulling back from as high as 104.36 overnight after a sharp drop in the U.S. JOLTS job openings data to a 2-1/2 year low in July.
The two-year Treasury yield, which is most sensitive to expectations for monetary policy, slumped as much as 18 basis points (bps) to 4.871% before recovering to around 4.9% in Asian trading hours.
The 10-year yield held near Tuesday's low of 4.106%, a level last seen on Aug. 11, hovering at around 4.13%.
The dollar bought 146.14 yen, recovering 0.2% from Tuesday.
The euro edged down 0.1% to $1.08675 after rallying 0.56% overnight.
Money market traders currently place 86.5% odds for the Fed to keep rates steady on Sept. 20, although the odds for a hike at the following meeting in November are close to 50/50.
Investors had raised hawkish Fed bets recently amid a spate of resilient data. Fed Chair Jerome Powell said on Friday that further tightening may be needed to cool still-too-high inflation, but also promised to move with care.
Meanwhile, Australian inflation slowed to a 17-month low in July, reinforcing the case for the Reserve Bank to hold rates steady at its policy meeting next week.
The Aussie dollar dipped as much as 0.46% after the data before last trading 0.17% lower at $0.64685.
Source : Reuters
