A gauge of the dollar slipped for a fourth straight day, even as US 10-year yields climbed to the highest since 2007, with the greenback weighed by China's most forceful yuan fixing on record. Yen stayed at levels that triggered intervention last year.

The Bloomberg Dollar Spot Index declined 0.1% after China's central bank set the daily reference rate for the yuan at the strongest bias versus estimates in a Bloomberg survey

Treasury 10-year yields were little changed at around 4.3% after reaching their highest level since 2007 as investors awaited a key speech later in the week by Federal Reserve Chair Jerome Powell

"There's been a bit of a dip in the USD on the back of the stronger-than-expected CNY fixing by the PBOC," said David Forrester, a senior currency strategist at Credit Agricole CIB in Singapore. "The USD could soften heading into Powell's speech on the back of some profit taking".

USD/JPY slipped 0.1% to 146.06 as Japan's 10-year yield climbed a new nine-year high.

The yen stayed weaker than 145.90, which is a zone that triggered last year's first yen-buying intervention since 1998. That kept traders on guard for potential comments from currency officials.

"This is another test of the BOJ's flexibility in targeting the 10Y JGB yield. The absence of a fixed rate operation would allow JPY to regain some ground against the USD," Forrester said.

USD/JPY eased back toward large 146.00 option strikes on long liquidation as US yields trimmed intraday gains, according to an Asia-based FX trader.

AUD/USD little changed at 0.6412.

Source : Bloomberg