Early trade in New York: euro slips versus yen and dollar
Although easing back on Tuesday, the euro remained on track to be the world's best-performing major currency this year, while the dollar looked set for its biggest annual gain against the yen since 1979. The eurozone common currency has gained 26 percent against the yen this year, though it fell 0.5 percent to 144.44 yen on Tuesday, having set a five-year high of 145.67 on Friday.
Copyright Reuters, 2014
Against the dollar, the euro has gained more than 4 percent, baffling many hedge funds that had expected a weak euro zone economy and a reduction in Federal Reserve bond-buying to strengthen the greenback this year. The Fed, however, finally announced its first move earlier this month and a steady reduction in the flood of dollars it is pumping into the economy looks set to contrast starkly with the Bank of Japan next year.
On Tuesday the euro slipped 0.3 percent to $1.3766 as the gap between US two-year government bond yields and German yields widened, increasing the relative attractiveness of the dollar. The dollar slipped 0.2 percent to 104.91 yen, but was up 21 percent for 2013, its biggest annual gain since a 23.7 percent rise in 1979, according to Thomson Reuters data.