The dollar held steady against the euro on Tuesday and edged up slightly from a 10-year low against the Australian dollar as investors booked profits after solid gains in higher-yielding currencies.
Expectations for the Reserve Bank of Australia and Bank of England to raise interest rates to 6.5 percent and 5.5 percent respectively, possibly at policy meetings this week, have given the Aussie and the pound a boost in the past month.
By contrast, the dollar has suffered as market players believe a US slowdown may prompt the Federal Reserve to cut rates from the current 5.25 percent as often as twice this year, thereby dulling the US currency's yield appeal. But major currencies were stuck in familiar ranges as investors looked for more clues on the health of the US economy and Fed policy.
"We're going to rely on triggers like figures and speeches to break out of ranges," said Luke Waddington, head of FX trading at Royal Bank of Scotland in Tokyo. "In this period of indecision, there's a lot more focus on the US data and anything with downside risk like the housing market."
The dollar edged up to 118.00 yen supported around 117.00 yen but having trouble breaking technical resistance at 118.50 yen after falling short of that level repeatedly last week. The euro was flat near $1.3363 holding between $1.3300 and a two-year high of $1.3412 struck in late March. Against the yen, the single currency firmed at 157.75 yen
Trade was subdued in Asia as flows from Japanese companies and institutional investors were limited just after the start of the new business year. "It is also difficult to expect big price action ahead of the Easter holidays on the weekend, when investors refrain from trading aggressively," said Takeshi Iba, head of the forex desk at Calyon bank in Tokyo.
Investors awaited US payrolls data later in the week for clues on the Fed outlook, as well as the RBA and BoE meetings to see whether the two central banks pull the trigger on higher rates or wait a little longer. The Aussie slipped 0.1 percent to $0.8155 after pushing as high as $0.8181 the previous session, its strongest since December 1996. The RBA announces its decision on Wednesday.
Sterling was flat at $1.9780 after touching a 10-week high of $1.9802. The pound has pushed back towards a 14-year high of $1.9917 struck in January on hopes for a BoE rate increase.