The dollar was mixed versus other major currencies Tuesday morning in New York, pausing versus the euro and sterling following big gains in the previous two sessions.

Unwinding of risk boosted the safe haven dollar since last Thursday, helping to the buck rebound from its 2009 lows.

The U.S. Labor Department is scheduled to release its preliminary report on second quarter non-farm productivity and unit labor costs at 8:30 AM on Tuesday. The consensus estimates call for a 5.4% increase in non-farm productivity, but a 2.4% decline in unit labor costs.

The Federal Reserve kicks off its two-day policy making meeting Tuesday.

The Fed 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.

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.

The dollar drifted lower versus the yen following the decision, slipping to 96.50. With the decline, the dollar eased from a month and a half high of 97.73.

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. Prior to the rally seen over the last few days, it had been a miserable summer for the buck versus the sterling, with traders betting on the health of the British financial system and expressing increased risk appetite.

Tuesday, the Office for National Statistics reported that the British trade deficit in June widened to GBP 2.2 billion from May's revised shortfall of GBP 1.9 billion. However, the balance stood below the expected deficit of GBP 2.3 billion.

The dollar continued to make up ground versus the loonie rising to a nearly 3-week high of C$1.0972. Earlier in August, the dollar touched a 10-month low of $1.0630.

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