By Saumya Vaishampayan and Barbara Kollmeyer
The dollar fell against the Japanese yen Thursday as a flare-up
in tensions between Ukraine and Russia overshadowed economic
data.
Russia said it started military exercises near the Ukrainian
border. The news came after Ukrainian forces killed pro-Russian
insurgents outside the city of Slovyansk as Ukraine tried to
reclaim its eastern region. The deaths elicited a warning from
Russian President Vladimir Putin.
The dollar dropped to ¥102.28 from ¥102.53 late Wednesday. The
yen is seen as a haven asset that tends to gain at times of
increased uncertainty.
The dollar had earlier risen against most rivals, including the
yen, after a stronger-than-expected reading on durable-goods
orders.
Orders for big-ticket items such as computers and heavy
machinery surged 2.6% in March, marking the biggest gain in four
months. The data were the latest to support the idea of a rebound
in economic growth after a severe winter, giving investors
confidence that the Federal Reserve will end its bond purchases
before the close of the year.
An end to the Fed's bond purchases would pave the way for an
increase in interest rates, which would make the dollar and U.S.
assets more attractive.
The ICE dollar index, a gauge of the dollar's strength against
six rivals, fell to 79.829 versus 79.869 late Wednesday. The WSJ
Dollar Index, which measures the greenback against more rivals,
fell to 73.08 versus 73.11.
The euro was at $1.3811 versus $1.3816 late Wednesday.
European Central Bank President Mario Draghi reiterated the
bank's concern about the high exchange rate Thursday and said
further euro strength could trigger easing measures. Any worsening
of the inflation outlook in the euro zone may lead to broad-based
asset buying, he said in Amsterdam.
The British pound rose to $1.6791 from $1.6782.
Write to Saumya Vaishampayan at svaishampayan@marketwatch.com
and Barbara Kollmeyer at bkollmeyer@marketwatch.com