The yen hit a five-month high versus the euro - and held some of its gains against the dollar - as investors saw the currency as a safe haven.
The yen hit a five-month high against the euro on renewed safe-haven inflows as the West imposed further sanctions against Russia.
Greg Gibbs, Senior Currency Strategist at RBS, says the Australian dollar fell on Wednesday because investors are focusing on tightening credit conditions in China rather than upbeat data.
The dollar clung to gains after bulls latched onto a comment by the head of the Fed that rates could rise sooner if employment continued to improve.
The yen eased on Tuesday after the Bank of Japan's growth warning, but it stopped short of hinting at a new bout of money-printing.
Keagan York, Head of FX Strategy, Compass Global Markets, expects investors to continue buying into the Aussie dollar which may strengthen to $0.95 to $0.97 against the U.S. dollar next year.
Boris Schlossberg, Managing Director of BK Asset Management, says the Aussie dollar may fall to 91 cents against the greenback if China's second quarter growth report disappoints.
The dollar was steady as investors awaited pivotal events, including Fed Chair Janet Yellen's congressional testimony, for fresh cues.
The yen was near a five-month peak against the euro as banking woes in Portugal drove equities lower and lifted demand for the safe-haven currency.
The yen rose as investors sought shelter from economic stress in Europe.
The BoE left interest rates and its asset purchase target unchanged amid concerns that a strong sterling is choking off an economic recovery.
The euro traded marginally stronger, with traders looking to a speech by ECB and minutes from the Fed meeting today.
The outlook for central bank policymaking dominated attention in major currency markets on Tuesday, with the dollar rally already fading.
German industrial output fell 1.8 percent on the month in May, its biggest drop in more than two years, surprising most analysts.
Paul Bloxham, Chief Economist for Australia & New Zealand at HSBC, says comments from the central bank governor may continue to weigh on the Australian dollar this week.
The dollar struggled to make more headway after a jump in U.S. job creation left stock markets in optimistic mood.
The dollar was broadly bid on Thursday by a stronger-than-expected U.S. nonfarm payrolls report for June.
Giles Keating, Deputy Global CIO, Private Banking & Wealth Management at Credit Suisse, discusses the central bank's comments and explains his "neutral view" on the currency.
Milk prices may unravel the popular carry trade of using currencies such as the yen or U.S. dollar to buy higher-yielding New Zealand dollar assets.
The report boded well for Thursday's U.S. nonfarm payrolls report, and provided a boost to the dollar.