The dollar was pushed away from a six-month low against the euro last week but was able to stay under the pressure over concerns that the US Federal reserve might not give clarity over its minutes with regards to the cutback on stimulus.

Speculations that the US central bank will begin to step back from its $85 monthly asset purchases from September has greatly underpinned the dollar at the same time lifted Treasury yields.

The Fed minutes are very critical and many are apprehensive towards impending disappointments. The main scenario is that the Fed will begin to taper down in the next succeeding months. If the Fed shows any concerns at all regarding the low inflation prior to seeing improvements in the labour market then they will probably send the dollar lower.
Any moves lowering the dollar were very unlikely to be drastic since investors have already been unwinding their already long dollar positions in the past weeks.

The dollar was up 0.2 % against the basket of currencies at 81.12 within the range of a two-month low of 80.75 hit. The euro was down 0.2 %losing its ground from last week’s peak as the yield premium of the 10-year US Treasury notes offered German bonds DE10YT narrowed.

The 10-year US Treasury yield has come down from its two-year high of 2.90 % as speculation on the Fed stimulus could scale back agitated emerging markets and added a safe-haven element of US debt.

The overall move to bid higher in the euro lacks conviction, especially given that the ECB has provided dovish forward guidance. At its current policy meeting earlier in August, the European Central Bank affirmed that interest rates will remain at the record low of 0.5 % in support of the underlying economy.

The dollar rose 0.2 % against the yen to 97.48, edging away from a one-week low of 96.91 set last week based on the figures from EBS trading platforms. Traders said that the yen earlier took its prompt from moves in Japan’s benchmark Nikkei share average which gave rise after the index slipped to its lowest since the middle of the second quarter. The yen has been inversely correlated to move in shares in the past months in Tokyo.

Analysts predict that the yen was weighed down by comments from the governor of the Bank of Japan that he was implying a non hesitating gesture in providing additional monetary stimulus should the downside increase the risks of its thriving the economy.