RTTNews - The dollar was widely mixed versus other majors on Tuesday, losing ground to the yen while extending its rebound versus its Canadian counterpart. At the same time, the dollar held its gains from the previous session versus the euro and sterling.
After a brutal month left the dollar at its 2009 lows versus all but the yen, the greenback began its comeback late last week as the summer rally in equities ran its course.
Renewed concerns about the economy and speculation European recovery efforts will stall led to a diminution of risk appetite, helping the world's reserve currency.
Trading took place as the Federal Reserve kicked off its two-day policy making meeting. On Wednesday, the FOMC is widely predicted to keep its base Federal Funds rate in its current range of 0 to 0.25%, where it has been since December 2008.
Meanwhile, the dollar held near 1.4175 versus the euro, holding onto most its very recent gains. Less than a week ago, the dollar was sitting at an 8-month low of 1.4446.
Against the sterling, the dollar leveled off near 1.6475, having touched a fresh 2-week high of 1.6430 overnight. Last week, the buck dropped to a 10-month low of 1.7042.
The dollar continued to make up ground versus the loonie rising to a nearly 3-week high of C$1.1050. Earlier in August, the dollar touched a 10-month low of $1.0630.
Against the yen, the dollar slipped to 96 from a month and a half high of 97.77. Tuesday, the Bank of Japan retained its key interest rate as expected and also maintained its cautious assessment about the economy.
The Policy Board of the BoJ unanimously decided to retain the uncollateralized overnight call rate at 0.1%. The last change in rate was a 0.10% cut in interest rates in the December 2008 meeting. Today, the central bank refrained from announcing more unconventional measures.
Wholesale inventories fell by much more than expected in the month of June, according to a report released by the Commerce Department on Tuesday, although the report also showed a modest increase in wholesale sales.
The report showed that wholesale inventories fell 1.7 percent in June following a revised 1.2 percent decrease in May. Economists had expected inventories to fall 0.9 percent compared to the 0.8 percent drop originally reported for the previous month.
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