By Cornelius Luca
New York, April 3 (BridgeNews) - One day after hitting a 29-month high versus the Japanese yen and four-month highs versus the key European currencies, the greenback slipped on profit taking. The overnight decline doesn't alter dollar's overall bullish momentum. Yen's recent sharp devaluation might acquire a political flavor in the near-term because of the China-U.S. airplane incident.
* * * The head of China's central bank, People's Bank of China's Dai Xianglong reportedly predicted further declines in the yen, which he said would trigger devaluations in Southeast Asian currencies. However, he was reported to have said that despite this the value of the yuan would remain unchanged, noting that it did so during the 1997-98 Asian crisis. This speech could be interpreted as pressuring the U.S. officials into curbing the decline of the yen in order to preserve the competitiveness of the Chinese products in the region.
The major European currencies advanced to two-day highs against the dollar.
Meanwhile dollar/Canada, which took another step toward its 1.5848 record high by climbing to a new 31-month high of 1.5812 late Monday, declined within the previous day's range.
With few events planned for Tuesday, the U.S. traders will likely keep the major pairs in decent two-way activity, although the dollar's upside is favored.

Current Previous Change Global Global
NY open NY close low high

USD/JPY 125.91 126.75 -0.84 125.53 126.83
EUR/USD 0.8842 0.8798 0.0044 0.8792 0.8871
EUR/JPY 111.33 111.50 -0.17 110.96 111.70
GBP/USD 1.4224 1.4178 0.0046 1.4184 1.4251
USD/CHF 1.7275 1.7356 -0.0081 1.7228 1.7351
USD/CAD 1.5790 1.5808 -0.0018 1.5775 1.5809
AUD/USD 0.4830 0.4787 0.0043 0.4778 0.4854
NZD/USD 0.4007 0.3965 0.0042 0.3971 0.4036
SP.1 1496.00 -21.00 1485.50 1527.00
ND.1 1495.00 -22.00 1482.00 1527.50