Dollar slips again despite signs of Fed stimulus end

The US dollar slipped again Wednesday despite more signs that the Federal Reserve could soon begin reeling in its stimulus.

The yen meanwhile powered higher ahead of Wednesday's expected updated assessment of the Japanese economy by the Bank of Japan after a two-day policy meeting.

At 2100 GMT the euro stood at $1.3334, compared to $1.3304 late Tuesday.

The dollar slipped to 96.39 yen from 97.72 yen, and the British pound gained to $1.5487 from $1.5346.

Meanwhile the euro fell to 128.55 yen from 130.01 yen.

Cleveland Fed President Sandra Pianalto on Wednesday was the third senior Fed official in two days to hint at a taper to the $85 billion a month bond-buying program soon, but said it would not happen if the jobs market weakens.

"If the labor market remains on the stronger path that it has followed since last fall, then I would be prepared to scale back the monthly pace of asset purchases," she said.

While such hints have dampened enthusiasm in equities, amid expectations that interest rates will continue to push higher, sentiment in the forex market was contrary: US Treasury yields fell and the dollar along with them.

"The lack of US economic data today failed to stop investors from selling dollars," said Kathy Lien of BK Asset Management.

"The greenback traded lower against all of the major currencies with the steepest losses seen against the Japanese Yen, British pound and New Zealand dollars."

She said the dollar's next move could be decided by what Chinese trade data, to be released early Wednesday, say about the world's second largest economy.

Either a plunge in exports or a plunge in imports in China, or both, "would be damaging to risk," Lien said.

"However, if Chinese imports and exports increase, currencies and equities could resume their rise."