The dollar hit a one-month low against the yen on Tuesday, staying on the defensive after recent US economic data were seen likely to limit the prospects of a near-term Fed interest rate hike. The dollar slid 0.8 percent to 100.43 yen and touched a low of 100.355 yen at one point, the greenback's lowest level against the yen in more than a month.
"It seems like there is a broad acceleration in dollar-selling momentum," said Teppei Ino, an analyst for Bank of Tokyo-Mitsubishi UFJ in Singapore. The dollar's fall gained momentum when it breached its August 2 low of 100.68 yen, Ino added. Against a basket of six major currencies, the dollar fell 0.2 percent to 95.417.
The euro edged up 0.1 percent to $1.1195. Against the yen, the euro slid 0.7 percent to 112.45 yen. The greenback has retreated against the yen and the euro after weaker-than-expected July retail sales were seen likely to delay a Fed rate hike. The markets will look to US data later in the day including consumer prices, housing starts and industrial output for another chance to gauge the health of the economy.
The dollar will probably fall further against the yen over the next few months, with the yen supported by factors such as Japan's rising current account surplus, said Heng Koon How, senior FX investment strategist for Credit Suisse. "Key risk to our view for more yen strength is of course more aggressive easing by the Bank of Japan when they next meet," said Heng, who expects the dollar to be trading at 96 yen three months from now. "But so far this year, they have disappointed and failed to turn around sentiment," he added.
Commodity-linked currencies were supported by this week's rise in crude oil prices. The Canadian dollar was at C$1.2914 per US dollar after touching a one-month high of C$1.2902 on Monday. The Australian dollar inched up 0.1 percent to $0.7683 after gaining 0.4 percent on Monday.