Dollar nurses losses as investors look to OPEC, US data
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TOKYO (Reuters) - The dollar nursed losses on Tuesday as U.S. Treasury yields came off of their multi-month highs, while volatile crude oil prices ahead of this week's oil producers' meeting kept investors' risk appetite in check.
Since the victory of U.S. President-elect Donald Trump on Nov. 8, the dollar has soared in line with yields on U.S. Treasury bonds, which have sold off on expectations that the Trump administration will embark on stimulus policies and boost inflation.
These expectations helped push up the benchmark 10-year Treasury yield
The dollar stood at 111.96 yen
"The dollar has been pulling back now in response to volatile oil prices, after rising on expectations of what Trump will do," said Mitsuo Imaizumi, chief currency strategist at Daiwa Securities in Tokyo.
"Against the yen, it could even fall back to the 110 level, depending on what oil does, and we also have U.S. data this week - although right now, the employment figures seem like a long time away," he said.
Crude oil prices have been on a roller coaster ride this week, as the market reacted to the developments on whether major producers would be able to reach an agreement on the contentious issue of output cuts at their meeting on Wednesday. [O/R]
Later on Tuesday, investors will look to U.S. third-quarter gross domestic product data as well as readings on consumer confidence and consumption for trading cues. They will be followed by the November employment report on Friday.
Data released early on Tuesday showed that Japan's unemployment rate in October held steady as the availability of jobs improved and household spending fell at a slower pace, a tentative sign that a robust labour market is lending support to domestic demand.
Political risks kept the euro in check, though it still managed to post a nearly two-week high of $1.0686
Worries about Italy's banking system have been mounting ahead of a Dec. 4 referendum on constitutional reform, which could unseat the government of Prime Minister Matteo Renzi.
More than 8 billion euros of legal claims against Monte dei Paschi di Siena
The dollar index, which tracks the greenback against a basket of six major rivals, scaled a nearly 14-year peak of 102.05 <.DXY> on Thursday before profit-taking and oil jitters brought it back down to earth. It was last at 101.160.
(Reporting by Tokyo markets team; Editing by Shri Navaratnam)
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