The dollar was underperforming on Wednesday, as expectations are growing that the US Federal Reserve will soon begin to start tapering its current $85 billion a month bond purchase program.
The dollar gave up gains made on Tuesday against the yen, falling sharply on Wednesday, by over 2 percent as investors took the opportunity to take profit from yesterday’s gains from strong US confidence data.
During early US session trading on Wednesday, the greenback slid to a low of 100.70 yen.
The dollar also weakened against the euro, with EURUSD climbing 0.7 percent to $1.2968. The move was mostly driven by a short squeeze and not by fundamentals.
Earlier in the day, Germany reported that the number of German out of work rose by 21,000 in May, much more than the 5,000 increase expected. Germany’s unemployment rate was unchanged at 6.9 percent, in line with expectations.
The dollar is overall stronger on the month against the euro and yen, having risen more than 1.6 percent against the euro and gained almost 4 percent against the yen amid growing speculation for Fed scaling back on QE.