The dollar trimmed gains against the other major currencies on Wednesday, as investors awaited a highly-anticipated speech by Federal Reserve Chair Janet Yellen due later in the day.
USD/JPY slipped 0.16% to 114.95, still close to Tuesday’s lows of 114.20, the weakest level since November 2014.
Demand for the yen continued to be underpinned as Japan’s Nikkei fell overnight, amid persistent fears over the health of the global economy and the eurozone financial sector.
Global stocks have sold off sharply this week, hit by a combination of fears over slowing global growth, more widespread use of negative interest rates, and prolonged depression in the commodity sector.
The yen’s gains came despite the Bank of Japan’s shock decision to adopt negative interest rates last month. Lower interest rates make a currency less attractive to yield-seeking investors.
Investors were eyeing Fed Chair Janet Yellen’s testimony before the House Financial Services Committee, scheduled later in the day, for indications on future interest rate hikes.
EUR/USD fell 0.30% to trade at 1.1259.
Elsewhere, the dollar was lower against the pound, with GBP/USD up 0.54% at 1.4551 and was steady against the Swiss franc, with USD/CHF at 0.9734.
The U.K. Office for National Statistics reported on Wednesday that manufacturing production decreased by 0.2% in December, disappointing expectations for a gain of 0.1% and following a decline of 0.3% a month earlier.
On an annualized basis, manufacturing production fell at a rate of 1.7%, worse than estimates for a decline of 1.4%, after declining at a rate of 1.2% in November.
The report also showed that industrial production fell 1.1%, compared to forecasts for a drop of 0.1% and following a decline of 0.8% in the preceding month.
Meanwhile, the Australian and New Zealand dollars were stronger, with AUD/USD up 0.50% at 0.7106 and with NZD/USD gaining 0.32% to 0.6656.
Earlier Wednesday, the Westpac Banking Corporation said its consumer sentiment index for Australia rose by 4.2% in February, compared to expectations for a 1.0% decline, after a 3.5% drop the previous month.
A separate report showed that Australia’s new home sales increased by 6.0% in December, after a 2.7% decline in November.
USD/CAD eased 0.09% to trade at 1.3854.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.13% at 96.16, after rising to 96.33 earlier in the session.