Dollar and euro drift, yen slips as markets seek direction

Business Recorder reported that the US dollar traded largely unchanged in early Asian trade on Tuesday, as a modest improvement in investor sentiment lifted higher-yielding currencies. The euro held at $1.1216, while sterling gained 0.1% to $1.3308. Against the yen, the greenback was flat at 158.56 yen ahead of a Japanese government bond auction.

Political strains in Europe kept traders on edge. French authorities imposed curfews in several cities on Monday after nationwide protests against the government, while Italy's government said it will send 500 soldiers following two days of unrest. ING analysts said the French-German 10-year spread climbed 9.9 basis points on Monday, reaching 147.3 basis points.

Chris Weston of Pepperstone Group said the euro's firmness suggested traders were not yet viewing France's problems as a broader European risk. Elsewhere, the dollar index rose 0.2% to 101.98, ending two sessions of losses, while the dollar was flat at 6.6811 yuan after the People's Bank of China held rates steady. Bitcoin was unchanged at $81,906.58 and ether gained 0.3% to $2,405.99.