Dollar backs off one-week highs vs. yen, euro high

The dollar was lower against the yen on Thursday, retreating from one week highs, while the euro pushed higher in quiet trade ahead of the Easter holiday weekend.

USD/JPY was last trading at 102.01, down from Wednesday’s highs of 102.35.

The yen regained ground as Japan’s Nikkei pulled back following strong gains in the previous session, as traders positioned ahead of the long Easter weekend.

On Wednesday, Federal Reserve Chair Janet Yellen said that monetary policy will need to remain accommodative for some time, citing slackness in the labor market and low inflation.

Ms. Yellen said the risks of persistently low consumer prices outweighed those of high inflation. She added that the central bank sees room for the U.S. unemployment rate to fall to between 5.2% and 5.6% by the end of 2016. The unemployment rate currently stands at 6.7%.

The euro was higher against the dollar, with EUR/USD rising 0.17% to 1.3837.

In the euro zone, data on Thursday showed that German producer price inflation fell 0.3% in March from a month earlier and was down 0.9% on the year. This was below expectations for a 0.1% increase on the month and a 0.7% decline on the year.

The weak data added to concerns over the risk of deflation in the euro zone.

Sterling was trading at four-and-a-half year highs against the dollar, with GBP/USD up 0.18% to 1.6826, the highest level since November 2009.

The pound strengthened against the other major currencies after data on Wednesday showed that the U.K. unemployment rate fell to a five year low of 6.9% in the three months to February. The upbeat data bolstered expectations that the Bank of England will raise interest rates ahead of other central banks.

The Swiss franc was higher, with USD/CHF losing 0.24% to trade at 0.8796.

The Australian and New Zealand’s were almost unchanged, with AUD/USD dipping 0.08% to 0.9362 and NZD/USD trading at 0.8624

Meanwhile, the Canadian dollar eased back from one-week lows, with USD/CAD slipping 0.13% to 1.0998.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.21% to 79.75.