The U.S. dollar fell against the euro and yen on Monday as traders pared back expectations Federal Reserve Chairman Ben Bernanke would hint at tapering bond purchases this week.
The yen rebounded from a 4 1/2-year low against the dollar, with the Japanese currency drawing support from comments by Economy Minister Akira Amari that the yen's excessive strength had largely corrected and further weakness could damage Japan's economy.
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Focus is shifting to Bernanke's testimony to Congress on Wednesday after recent comments by Fed officials have fueled speculation the central bank may taper its bond purchases sooner than expected.
"We may have been moving a little bit too early," said Andrew Dilz, foreign currency trader at Tempus Inc. in Washington. "I see a continuing of this exact pace of current purchases at least through the end of the summer, which is going to put some pressure on the dollar."
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