SINGAPORE: The dollar´s index against a basket of six major currencies stood at 90.509 on Tuesday, pulling up from Monday´s three-year low of 90.279."We have been of the view that the risk on the euro/dollar is still on the upside," said Tan Teck Leng, forex analyst for UBS Wealth Management in Singapore.
"The euro is still not at a level that should concern the ECB," Tan said, adding that the euro´s recent strength seems to have had little negative effect on euro zone business sentiment or exports.
The dollar has weakened recently as markets grow increasingly confident that a global recovery will outpace U.S. growth and prompt other major central banks, led by the ECB, to unwind their easy money strategy faster than has been expected. Against the yen, the dollar rose 0.4 percent to 110.93 yen , edging away from a four-month low of 110.32 yen set on Monday. Market participants cited short-covering in the dollar in the wake of its fall over the past week, and there was also talk of dollar-buying by Japanese importers.
A small cut to the Bank of Japan´s buying of long-dated Japanese government bonds in a regular market operation last Tuesday had spurred speculation that the BOJ could edge away from its massive stimulus programme, pushing the yen and global bond yields higher.