Investors expect the Federal Reserve to tighten monetary policy, and expect the Bank of Japan to keep its ultra-easy monetary stance intact.» Read More
The yen came under pressure from Japan's plans to increase its pension allocation to the domestic stock market.
LONDON, Aug 7- The yen sagged against the dollar on Thursday, coming under pressure from news that Japan's public pension fund plans to increase its allocation to the domestic stock market. All eyes in Europe will be on the European Central Bank's monthly news conference, starting at 1230 GMT, but the action overnight was all about the yen and the Australian dollar.
Jonathan Cavenagh, Senior FX Strategist at Westpac Institutional Bank, expects the Australian dollar to weaken further against the greenback following July's dismal jobs data.
The dollar held near an 11-month high, supported by upbeat U.S. data, while the New Zealand dollar took a hit from a fall in dairy prices.
The US dollar extended a rally after an 8-1/2 year high in services growth and a bigger-than-expected increase in factory orders.
The euro headed back below $1.34 on Tuesday after a survey of Italian service sector purchasing managers disappointed on the low side.
Emerging market currencies are likely to remain weak for the long term, and that's spurring a strategy shift, General Motors said.
The dollar hovered around 10-month highs ahead of U.S. jobs data on Friday.
The U.S. dollar edged higher against a basket of major currencies on Thursday after labor market data fueled expectations for a hawkish Fed.
The dollar rose against a basket of currencies on Wednesday, after the Fed announced it will cut its asset buying program by another $10 billion.
Fears over Ukraine unrest and an upcoming slew of US data are also pushing some currencies slightly down against the dollar.
With the resurgent greenback set to react further to economic data coming from the U.S., many analysts have argued that sterling has reached a tipping point.
The dollar fell slightly against the euro ahead of Wednesday's release of US gross domestic product growth and a Fed policy announcement.
The euro struggled to hold above eight-month lows against the dollar on Friday, hurt by a dive in Germany's Ifo survey of business sentiment.
The euro climbed from an eight-month low on Thursday after German and French business activity beat expectations.
The euro's resolve could be starting to crack, as it cleared "psychologically significant" barriers, according to strategists.
The euro hit an eight-month low against the dollar on Wednesday as worries drove investors away from the single currency.
The U.S. dollar turned flat against the euro, giving up earlier gains which drove the European currency to an eight-month low.
LONDON, July 22- The Australian dollar rose on Tuesday, the main mover on developed world currency markets, after the country's central bank chief said he was happy with current interest rate levels and made no attempt to talk down the currency.
The euro regained ground on the dollar, but trading was not energetic thanks to a holiday in Japan and geopolitical tensions.