Dollar wobbles as China fixes yuan higher, North Korea concerns

The Chinese yuan traded higher in early Asian trade on Tuesday with market analysts saying the move was aimed at achieving market stability ahead of a key political gathering in Beijing next week.

The US dollar traded at around 6.597 against the yuan, compared with 6.6147 at the close of the previous session. The yuan rose after policy makers lifted the currency's midpoint higher ahead of the market open on Tuesday.

The People's Bank of China (PBOC) fixed the official midpoint at 6.6273 per dollar, firmer than Monday's fixing of 6.6493 per dollar.

The strength of the Chinese currency weighed on the overall strength of the greenback, with the dollar index trading 0.2 percent lower.

USD/JPY was little changed on Tuesday, as the market grew concerned of potential North Korean provocations, while the euro rose following better-than-expected German data and hawkish-sounding comments from a European Central Bank official.

USD/JPY traded around 112.50. It had jumped up to a near three-month high of 113.440 on Friday on robust U.S. wages data before pulling back on North Korea concerns. EUR/USD edged up to 1.1788 overnight.

The Turkish lira bounced back from nine-month lows hit the previous day following a decision by the United States and Turkey to scale back visa services amid the latest sign of deteriorating relations between Ankara and its NATO allies.

USD/TRY stood at 3.6805 after soaring to 3.9223 the previous day, its weakest since January. During Monday's fall the lira had approached a record low of 3.9417 struck at the start of the year on inflation woes and concerns over domestic politics.

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