The dollar rate rose on the Asian market Tuesday as the euro slightly slid ahead of economic data that are expected to show a deterioration in German business sentiment.
The euro fell to US$1.2868 in Tokyo midafternoon from US$1.2892 late Monday in New York. The dollar was trading at 116.10 yen, up from 115.80 yen.
Read more about the dollar-euro struggle here
German think-tank ZEW's economic sentiment indicator is expected to drop to 10.3 in August from 15.1 in the previous month, according to a Dow Jones Newswires survey of economists.
If the index falls, that would mark the seventh straight monthly drop as high oil prices and concerns about exports weigh on the business climate in the euro-zone's largest economy.
"The euro has hit a top against the dollar and the yen in the short term," said Jun Kitazawa, vice president of foreign exchange at BBH Investment Services.
"A lot of people have been buying euros, but since we failed to hold resistance at US$1.2910, people are waiting to take profits in large amounts," he said, adding that the euro could fall to US$1.2700 in the days ahead.
Currency traders are also on the lookout for comments from U.S. central bankers later in the day. Federal Reserve Bank of Atlanta President Jack Guynn is giving a speech on transitions in the U.S. economy. Chicago Fed President Michael Moskow will also speak about the economy.
The comments may fail to boost the dollar, however, as last week's economic data supported the Fed's view that slower growth will reduce inflationary pressure.
"Fed members aren't likely to mention their concerns about inflation," said Lu Xinyi, chief strategist for the treasury division at Mizuho Corporate Bank. "But people aren't in a rush to sell the dollar against the yen, because the interest rate spread is still very wide."
U.S. interest rates stand at 5.25 percent, while Japanese interest rates are at 0.25 percent, the AP says.
The dollar was mostly higher against other regional currencies, climbing to 51.255 Philippine peso from 51.13 the previous session, 46.508 Indian rupee from 46.42, and 9,076 Indonesian rupiah from 9,066.