The U.S. dollar advanced against most major currencies on Tuesday, but weakened against the euro after a U.S. Federal Reserve official indicated that the central bank may not taper its bond-purchasing program soon.
St. Louis Federal Reserve Bank President James Bullard said at an event in Frankfurt that the Fed should continue with the quantitative easing to boost U.S. economic growth. He also said that the central bank can adjust the pace of bond-buying according to changing economic conditions.
Meanwhile, the market is closely watching Fed Chairman Ben Bernanke's scheduled testimony before the U.S. Congress on Wednesday, which may give some hints about the Fed's exit strategy from its massive bond-purchasing program.
The dollar rose again versus the Japanese yen on Tuesday, but stayed under the 103 level, which it broke last Friday following an upbeat U.S. consumer confidence report.
The yen somewhat recovered on Monday after Japan's state minister for economic revitalization, Akira Amari, said that the currency's further weakness could harm the Japanese economy, indicating that it may have depreciated enough.
The Bank of Japan will begin a two-day policy meeting on Tuesday, and is expected to maintain its current policy. The central bank announced on April 4 that it would purchase 1.4 trillion dollars of assets in the next two years to fight the two- decade-long deflation.
In late New York trading, the euro rose to 1.2901 dollars from 1.2897 in the previous session, while the British pound slipped to 1.5152 dollars from 1.5269. The Australian dollar dropped to 0. 9803 dollars from 0.9818.
The dollar bought 102.54 Japanese yen, as against 102.27 in the previous session. It also edged up to 0.9703 Swiss francs from 0. 9662, and rose to 1.0271 Canadian dollars from 1.0228.
