Greenback falls against yen; euro trades in narrow range

Australian $ slides as soft CPI dents rate expectations
NEW YORK: The dollar fell versus the Japanese yen on Wednesday as a weaker-than-expected reading on new orders for US durable goods added to fears about the US economic outlook.
Demand for the dollar also fell against the euro as investors awaited for more supportive news for the euro, which rose above $1.30 but has been stuck in a range recently.
The Federal Reserve is due to release its report on regional economic conditions, known as the Beige Book, later in the session. But analysts said the Fed is likely to report softer economic conditions, which may add to investors' risk aversion.
The euro rose 0.1 per cent to $1.3007.
Markets seemed comfortable with euro/dollar around 1.30, but investors were still wary of opening up new long euro positions that would take it much higher, said BNY Mellon's Michael Woolfolk.
"We came a long way this year, from $1.40 to below $1.20 in the euro, and a lot of that was based on the fear factor. So the retracement has been merely people taking out a lot of those short positions," he added.
In late morning trading in New York, the dollar was 0.4 per cent lower at 87.48 yen. It touched a session low at 87.44 yen as a report showed new orders for long-lasting US manufactured goods unexpectedly fell for a second straight month in June, posting their biggest decline since August.
The euro touched an 11-week high against the dollar at $1.3045 on Tuesday, helped by strong bank earnings and gains in European equities, following last week's favorable results of regulatory stress tests.
Traders said an option barrier at $1.3050 would need to be taken out for a move toward Fibonacci resistance at $1.3125, which is a 38.2 per cent retracement of the December-June move.
Large option expiries were reported by traders at $1.3000 and $1.2850, potentially slowing the euro's gains on the day. Elsewhere, the Australian dollar slid 1 per cent to $0.8918, having dropped from a 11-week high of $0.9069 the previous day. Australian consumer prices rose much less than expected last quarter, and core inflation slowed to its lowest in more than three years. -Reuters