The dollar suffered slight losses in early trading on Thursday, as traders focused on assessing the outlook for U.S. interest rates following comments from Federal Reserve officials that reinforced expectations that monetary policy tightening would remain in place for a longer period.
The dollar has made strong gains in recent weeks after a series of U.S. economic data dashed expectations of a near-term rate cut, while rising tensions in the Middle East have boosted the greenback’s appeal as a safe haven.
The dollar's strength has had its say in currency markets, keeping the yen near a 34-year low and prompting warnings from Japanese authorities amid concerns among traders about possible intervention. Emerging market currencies are also under pressure.
The United States, Japan and South Korea agreed on Wednesday to consult closely on foreign exchange markets in the first trilateral financial dialogue, reflecting Tokyo and Seoul's concerns about recent sharp declines in their currencies.
The euro fell slightly on Thursday to $1.0664, after rising 0.5 percent on Wednesday and moving away from a five-month low it touched on Tuesday.
The pound sterling was last trading at $1.2449, up 0.02 percent on the day.
The dollar index, which measures the greenback against a basket of six major currencies, was last at 105.97, off a 5-1/2-month high of 106.51 hit on Tuesday as traders consolidated positions. The index is up 4.5 percent this year.
U.S. Federal Reserve official Michelle Bowman said on Wednesday that progress in slowing inflation in the United States may have stalled.
The yen rose slightly by 0.05 percent to $154.29, but remained close to a 34-year low of $154.79 touched on Tuesday. The currency has fallen 8.65 percent since the start of the year.
The Australian dollar was little changed at $0.6439, while the New Zealand dollar eased slightly to $0.5914 after rising 0.6 percent on Wednesday.
