Investing.com - The dollar was holding above five-month lows against the yen on Tuesday following remarks by U.S. Treasury Secretary Steven Mnuchin, but ongoing geopolitical tensions limited the greenback’s gains against the safe haven yen.
USD/JPY was steady at 108.92 after falling to a five-month trough of 108.12 on Monday amid worries about North Korea and the upcoming French presidential elections.
Mnuchin, in an interview in the Financial Times newspaper said that while he agreed with U.S. President Donald Trump's view that the dollar's strength in the short term was hurting exports, he saw a strong U.S. currency over the long term as a positive.
Last week Trump said the dollar was getting too strong, sending the dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, to its lowest level since late March.
But the dollar struggled to make headway as investors remained wary as trade talks between the U.S. and Japan got underway on Tuesday.
Heightened tensions around North Korea, which has vowed to conduct more missile tests following Sunday's failed missile launch, also continued to weigh on market sentiment.
The U.S. dollar index ticked down 0.08% to 100.12, after rising as high as 100.31 earlier in the session.
The euro was a touch higher, with EUR/USD edging up 0.1% to 1.0653.
Sterling gained ground against the dollar and the euro, with GBP/USD rising 0.25% to 1.2596 and EUR/GBP slipping 0.18% to 0.8453.
The Australian dollar was weaker, with AUD/USD down 0.66% to 0.7540, off the two-week peaks of 0.7609 hit on Monday following stronger-than-expected growth data out of China.
The Aussie weakened after Tuesday’s minutes of the central bank's April meeting highlighted the balancing act it faced between a subdued labor market and rising household debt.