NEW YORK: The dollar climbed to one-month peaks against the yen on Tuesday on the back of broadly higher US Treasury yields, while the euro was weighed down by official comments and media reports on the progress of discussions over a new debt deal for Greece.
The euro sank below $1.13 in morning trade in Europe, but recovered some of its losses after a report said European officials would make a compromise proposal to give Athens another six months to negotiate a deal.
US Treasury yields, whose rise has been a key argument for the dollar's strength since the middle of last year, have jumped 20 basis points since early on Friday.
That move has supported the greenback overall, especially versus the Japanese currency, though some analysts say the dollar may be hard-pressed to surge again in the absence of a major market driver.
"A lack of major positive data on this side and little in the way of new, negative news out of the euro zone has largely held the dollar within a recent range," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
"After rallying to a near an 11-year trade-weighted high in the wake of last Friday's strong US payrolls report, investors will need a significant catalyst to add to the greenback's very strong gains of late."
In mid-morning New York trading, the dollar was up 0.4 percent against a basket of currencies at 94.790.
Against the yen, the dollar gained 0.7 percent to 119.46 yen . Earlier, the dollar hit a one-month high of 119.61 yen.
The euro, meanwhile, slipped 0.2 percent to $1.1297.
"Everybody's trying to get on the right side of what's going to happen with Greece," said John Doyle, director of markets at Tempus Consulting in Washington.
"I think there's some positioning on the euro on either side of $1.13." Fears that Greece's new government could be inching its way out of the single currency in a standoff with Germany have begun to weigh on the euro this week.
The main event overnight was a fall in Chinese inflation to a five-year low, providing support for expectations of further policy easing by Beijing to protect economic growth.
That boosted Shanghai stocks and spurred a 0.7 percent gain in the Australian dollar to US$0.7749.
The Australian dollar is highly geared to the outlook for its main Asian trading partner.
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