TOKYO: The dollar was under pressure against the euro and other currencies Wednesday after its rally ended on doubts over a US rate rise and speculation about a Greek funding deal.
The greenback slipped to 123.96 yen in Tokyo trading from 124.09 yen late Tuesday in New York, and way off from a more than 12-year high of 125.05 yen recorded earlier Tuesday in Tokyo.
The euro bought $1.1155 and 138.32 yen Wednesday in Tokyo, compared with $1.1152 and 138.39 yen Tuesday in New York.
The dollar took a hit from remarks Tuesday by US Fed governor Lael Brainard that a recent run of weak data casts doubt on the strength of the US economy, which clouded expectations for a rate hike later this year.
Fresh data Tuesday showed US factory orders in April fell by a sharper-than-expected 0.4 percent, logging the eighth contraction in nine months.
The euro gained on speculation that Greece is moving closer to a deal with international creditors to avert a default.
"This was a classic squeeze on the US dollar across the board, and really led by euro," said Raiko Shareef, a markets strategist in Wellington at Bank of New Zealand.
"There was an almost perfect storm of factors to give the US dollar a bit of a knock back," he said.
Greek Prime Minister Alexis Tsipras will meet European Commission President Jean-Claude Juncker Wednesday for make-or-break bailout talks, with a deadline looming for Athens to make a critical repayment.
Greece has until Friday to repay 300 million euros ($328 million) it owes to the International Monetary Fund.
There are fears that Athens does not have the necessary funds and will default, possibly setting off a chain reaction that could end with a messy exit from the eurozone.
"The euro clearly has the ability to lead the dollar higher or lower across the board, and really that vulnerability stems from very different potential outcomes you get from the negotiations between Greece and its creditors," Shareef said.
The euro also gained on data Tuesday that showed eurozone inflation climbed to 0.3 percent in May, reviving hopes of economic recovery in Europe.
"It's not rocketing away, but perhaps puts the market's mind to the fact that the ECB may not have to buy bonds forever," National Australia Bank said in a note.
The European Central Bank will hold a policy meeting later Wednesday, with a press conference by president Mario Draghi to follow.
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