The dollar came under pressure in early dealing on Tuesday, but steadied later in the day as traders took a “wait and see” approach to events playing out in Japan and the Middle East.
A report showing that U.K. inflation surged in February drove the dollar to a new yearly low versus the sterling.
The Bank of England and the European Central Bank are widely expected to tighten monetary policy in the next month or two in order to fight off rising consumer prices.
The buck dropped to $1.64 versus the sterling for the first time since January 2010. Versus the euro, the buck bottomed out at a new 4-month low of $1.4247, then stabilized near $1.42.
There was practically no movement for a second day versus the yen. The dollar, which hit a record low of Y76.30 last week, stayed near Y81 today.
The U.S. was among the G7 nations that took the highly unusually step of selling yen reserves in order to weaken the Japanese currency.
A stronger yen hurts Japanese exporters as the nation struggles to recovery from its worst earthquake in decades.
The dollar was steady at CHF 0.9025 versus the Swiss franc, having touched a record low of CHF 0.8918 last week.
Switzerland’s exporting sector has been remarkably resilient so far, but stronger franc may lead to a slowdown in export growth, Swiss National Bank President Philipp Hildebrand said Monday. He added that inflation expectations remain stable.
Earlier in the day, official data showed that Swiss exports climbed 15.2 percent annually in February following a 10.5 percent increase in January.