Investing.com - The dollar edged lower against the yen and the Swiss franc on Thursday as market sentiment was hit after the West imposed a fresh round of sanctions on Russia, bolstering safe haven demand.
USD/JPY slipped 0.15% to 101.51, off Wednesday’s one week highs of 101.78.
Market sentiment soured amid fears that heightened tensions between Moscow and the West could hit the global economy after the U.S. announced a new swathe of sanctions against Moscow for supporting Ukrainian separatists.
USD/CHF dipped 0.09% to 0.8973, coming off Wednesday’s highs of 0.8988.
The dollar’s losses were held in check after Federal Reserve Chair Janet Yellen said earlier in the week that interest rates could rise sooner than expected if the economic recovery continued to improve.
The weaker euro was at one month lows against the dollar, with EUR/USD at 1.3525 as the divergence on monetary policy between the European Central Bank and other central banks pressured the single currency lower.
ECB President Mario Draghi said earlier this week that large scale asset purchases are “squarely” within its mandate. The remarks were the latest indication that the central bank is open to further monetary easing measures to stave off the risk of deflation in the euro area.
The pound slipped lower, with GBP/USD down 0.15% to 1.7112, down from a nearly six-year high of 1.7190 struck on Tuesday.
Data on Tuesday showing that the annual rate of inflation in the U.K. accelerated in June added to signs that the economic recovery in the U.K. is deepening, bolstering expectations that the Bank of England will raise interest rates before the end of the year.
However, a report on Wednesday showing weak wage growth in the U.K. saw investors slightly trim back these expectations.
AUD/USD edged up 0.09% to 0.9374, while NZD/USD was down 0.20% to three week lows of 0.8693.
The Canadian dollar was little changed near three-week lows with USD/CAD at 1.0738 after the Bank of Canada left rates on hold on Wednesday and said the future part of monetary policy would be data dependent.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, edged down 0.07% to 80.55, not far from Wednesday''s one month highs of 80.66.