The US dollar showed volatile movements ahead of the release of US producer inflation and retail sales data.
The US dollar initially posted gains during the Asian session following the fall of the Japanese yen after the Bank of Japan (BOJ) let down.
Contrary to expectations, the BOJ did not make any changes in its yield curve control policy and kept its key policy settings unchanged at its latest policy meeting.
This left the yen down more than 2% from an 8-month high against the US dollar in early reaction to the BOJ announcement.
Even so, when things started to calm down, the losses recorded by the yen were reduced again and the US dollar shrank again as the market entered the European session.
This is because, the USD still does not have a strong catalyst to support it, and the US economic data in the next New York session can be the determinant of the direction of the giant currency.
Other major currencies resumed gains, with the pound leading the trade even as published UK inflation data showed a drop for the second consecutive month to 10.5% from 10.7% in December.
Meanwhile, the euro also rose by erasing some of the losses recorded following a dovish report on the European Central Bank (ECB).
Earlier, it was reported that policymakers may opt for a 50 basis point rate hike in February and reduce the increase to 25 basis points from March.
Commodity-related currencies, the Aussie, New Zealand and Canadian dollars remained trading stronger at monthly highs compared to the greenback.
