The dollar fell against the yen for a second day in a row, weighed down by lower bond yields and profit-taking pressure in equities, coupled with a modest yen repatriation trade that drove USD/JPY to an eleven-day low of 116.22 during early European trade.
Although the dollar made up some lost ground by the North American open, it could not make a serious challenge to 117.00 in spite of upbeat labor market data. USD/JPY lingered at 116.83 before retreating back to 116.20 and then snapping back to 116.60 to leave the yen 0.50% higher.
The euro faced difficulties at today’s highs as well, but the pull-back was mitigated by losses in the other dollar pairs. EUR/USD reached a ten-day high of 1.0493, just shy of 1.0500, retreated, and made another attempt later in the North American session.
The convergence of the 50-, 100- and 200-hour moving averages at 1.0428 to 1.0443 is giving support to the euro, while the upside seems to be blocked by 1.0500. The apathetic pre-holiday trading environment is not expected to give the euro a hand in breaching 1.0500, so we’ll likely see another range-bound day on Friday.