The dollar slipped on Wednesday from two-week highs against the euro and the yen, but it was propped up as more investors sided with the view that the Federal Reserve would raise interest rates next week.
A report on Tuesday showing the US trade gap shrank unexpectedly in July helped to support the dollar as investors see the Fed extending its 14-month stretch of interest rate rises when it meets on September 20.
Currencies shuffled in tight ranges on Wednesday as many traders avoided making big bets until they saw how the Fed interpreted Hurricane Katrina's impact on the economy in its post-meeting statement.
Some analysts expected trading to slow to a crawl this week despite a wave of US economic data, including August retail sales and industrial production figures later in the day and consumer prices for August on Thursday.
While much of this week's data reflects pre-Katrina economic conditions, two regional factor surveys for September - also due on Thursday - should offer some insight on how the hurricane's impact has rippled to other parts of the country.
A few Fed officials have said in the past two weeks that they were still judging the scope of Katrina's hit to the economy but were worried about steep energy prices quickening core inflation.
By late Tokyo trading, the dollar was down slightly at 110.55 yen. It has been mostly stuck between 109 yen and 111 yen over the past month.
The Japanese yen failed to make significant gains on comments by Bank of Japan Deputy Governor Kazumasa Iwata that the central bank was "very close" to ending its super-loose monetary policy.
The comments drove benchmark euroyen futures to their lowest level since February 2001. That was just before the BOJ first launched its quantitative easing policy, in which it floods the banking system with cash and pins short-term rates virtually at zero percent.
The money market futures contract at one point priced in a three-month TIBOR rate of 0.345 percent in a year's time compared with the current 0.09 percent.
The euro has taken a hit this week as the parties competing in Germany's election on Sunday were in a dead heat, raising the possibility of a grand coalition between conservatives and socialists that could stymie reforms.
The single currency rose around 0.2 percent to $1.2285, having floated between a three-month high of $1.2590 hit in early September and a mid-August low near $1.2125.
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