The dollar slipped again today nearly at a record low against the euro, but the market hesitated to drive down the US currency further before closely watched economic releases later in the week.
After weeks of heavy selling on worries about the twin US deficits and central banks diversifying out of dollars, the dollar has stabilized in recent days on profit-taking and worries about intervention by Japanese officials.
"This is a week for the dollar to slowly recover," said one head trader at a European investment bank.
Remarks by European Central Bank President Jean-Claude Trichet suggesting the bank was unlikely to intervene in favor of the dollar drove the currency to a new record low against the euro yesterday, but traders said that swift slide seemed to have eased.
Market players were turning their attention to a slew of economic indicators due in the United States this week, including manufacturing data on Wednesday and the monthly payrolls report on Friday.
If the reports reinforce expectations that the Federal Reserve
will steadily lift US benchmark interest rates, the dollar could receive support, said some traders and strategists, though economic news has been mostly ignored in the two-month dollar sell-off.
In late Tokyo trade, the dollar fetched around 102.75 yen, down from 103.08 in late US trade but above Friday's low of 102.15 yen -- the lowest rate since March 2000.
The yen gained despite a 1 percent slide in the Nikkei stock average that took it to a one-month closing low.
Selling of dollars for yen was driven mainly by exporters, especially as the U.S. currency stood above 103 yen. But traders said there were big bids to buy dollars at 102.50 yen, potentially limiting any further losses.
The euro bought around $1.3315, up from $1.3282 in late New York trade but below the record high of $1.3336 reached overnight.
The euro was a tad down at 136.75 yen.