Dollar tumbles in Asia

The dollar hit a one-week low against a basket of currencies on Thursday, hurt by worries over rising tensions in the Middle East and as subdued US economic data helped keep a rise in US bond yields in check. But traders were not overly bearish on the currency against the backdrop of a generally improving US economy and also as the euro is seen susceptible to lingering worries over the eurozone's debt problems.
The greenback fell on Wednesday after Israel's foreign minister, a vociferously far-right partner in the conservative coalition, said two Iranian warships planned to sail through the Suez Canal en route to Syria, calling it a "provocation". The dollar index fell as low as 78.048, its lowest in a week, before recouping losses to stand at 78.201, little changed from late Wednesday US levels. It was well above its three-month low of 76.881 hit earlier this month - a support few traders expect it to test in the near future.
The euro held firm at $1.3572, after having risen 0.5 percent on Wednesday, to $1.3588, extending its recovery from a three-week low of $1.3428 hit last week. While persistent buying by sovereign players below $1.35 is seen supporting the euro, the currency could face resistance around $1.3630-45, where its 14- and 21-day averages lie as well as a 50 percent retracement of its decline earlier this month.
The dollar fetched 0.9585 franc, having fallen as low as 0.9554 franc on Wednesday, while the euro bought 1.3005 francs, near a one-week low of 1.2974 hit on Wednesday. The dollar also ran out of steam against the yen after hitting an eight-week peak of 83.98 yen on Wednesday. It fetched 83.58 yen.
The US currency also hovered just above a near three-year low against the Canadian dollar. It traded at C$0.9841, just a hair above low of $0.9832 hit earlier this month. The US dollar also lacked fuel as US bond yields have shown signs of stabilising. US industrial output data fell short of market expectations a day after retail sales data disappointed investors.