Dollar declined against major counterparts in Europe on Tuesday, as weaker-than-expected report on U.S. factory activity hurt already jittery global markets and the dollar, leaving investors seeking for traditional safe-haven assets such bonds and the Japanese yen. Poor ISM readout on U.S. manufacturing on Monday exacerbated growth fears and further directs attention to the non-farm payrolls due at the end of this week. The Institute for Supply Management's factory index decreased to 51.3 in January from 56.5 the prior month. The Japanese yen has seen a little turnaround today, edging up against the dollar in early European trades as a selloff in risk assets forced investors to cover bearish positions in the low-yielding Japanese currency. Dollar lost some of its gains against the yen, where the USDJPY pair was trading down at ¥101.274 based on the four-hour chart, after opening at ¥101.443. The pair so far hit a session low of ¥101.200. The pair is likely to continue the short term bearish bias. Stabilizing below ¥100.769 support will probably see further downside. Sterling pound climbed for the first time in more than a week against the dollar, following UK construction output report that showed the sharpest expansion since August 2007 . UK Purchasing Managers' Index (PMI) on constructions rose sharply to 64.6 last month, from 62.1 in December. The GBPUSD pair was last seen at $1.63325 up from an opening of $1.63317 . The pair so far recorded an intraday high of $1.63436 and low at $1.632250 . In contrast the euro was stable against the dollar, amid speculations the European Central Bank (ECB) will further cut interest rate or add more measures to stimulate the economy to debase the currency after the surprising decline in inflation rates. Based on the four-hour time frame, the euro remained mixed against the dollar, fluctuation between gains and losses. The EURUSD pair last traded at $1.335198 , after starting the session at $1.35119 . The pair was likely to face resistance at $1.35382 levels and support at $1.34750 . A break below that support, we will probably see further downside. Aussie declined against the dollar after rising sharply earlier in the day, after Reserve Bank of Australia (RBA) indicated it's no longer leaning toward cutting interest rates and stripped out language from its statement about the possibility of further rate reductions. The AUDUSD pair is currently trading at $0.88829 after starting the session at $0.89006 . The pair so far hit a session high of $0.89014 and a session low of $0.88736 .
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