The dollar edged lower in Asia on Tuesday as the slide in U.S. Treasury yields over the past two weeks gave investors less incentive to buy the greenback, while a sharp fall in Portuguese bond yields bolstered the euro.
The recent fall in U.S. yields came after top Federal Reserve officials, including Chairman Ben Bernanke, stressed that the timing of any reduction to the central bank’s $85 billion in monthly purchases would depend on economic data.
Soft U.S. housing data on Tuesday led to dollar selling and added to the perception that the Fed has no reason to rush to trim its stimulus program.
“There are fewer fears of an imminent Fed tapering, and yields on U.S. Treasurys are off their recent highs,” said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo.
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