The dollar on Tuesday took a pause in what has been a relentless climb higher as the euro and even the besieged Japanese yen and British pound managed to recover a little ground, but medium-term fundamentals were still in the greenback's favour.
The euro rose 0.42% to $0.9647, sterling climbed nearly 1% to $1.0783, and the dollar slid 0.33% against the yen to 144.25.
These moves were minor however compared to the multi-year lows at which all three currencies are languishing. The euro was still near its 20-year trough hit the day before, and the yen was just off its 24-year nadir hit last week before Japanese authorities intervened to strengthen the currency.
Sterling was not too far from its record low against the dollar of $1.0327 hit Monday, the end of a plunge that began Friday when markets were spooked by Britain's gambit of relying on unfunded tax cuts to spur growth, which also sent short-term gilt yields up 100 bps in two days.
"Everyone's got this hope that the dollar is peaking and peaking and peaking, but it's just been far too premature," said Paul Mackel, global head of FX research at HSBC.
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