LONDON, July 26: The dollar climbed against the yen on Tuesday on fading expectations of there being further revaluation of the yuan soon, while the euro struggled despite further improvement in German business confidence. The euro fell to 1.2016 dollars in early European trading, from 1.2062 late on Monday in New York.

The dollar rose to 112.17 yen from 111.41 on Monday. China’s central bank Tuesday sought to temper speculation that further adjustments to its currency could be forthcoming after it last week revalued the yuan and delinked its decade-long peg to the dollar.

The 2.1 per cent adjustment does not mean that the yuan exchange rate has been appreciated as a first step and that there will be further adjustments, it said in a statement on its website.

Some foreign media have misunderstood the content of the foreign exchange reform, with some even thinking that the 2.1 per cent is just an initial adjustment, it insisted. China last week caught markets by surprise when it revalued its currency to 8.11 to the dollar, compared to the previous rate of 8.28.

Derek Halpenny, an economist for The Bank of Tokyo-Mitsubishi, said Tuesday’s statement would result in the foreign exchange market shifting its focus back to economic data. Data that drives the direction of interest rate differentials will be key to the foreign exchange market, he said.

The euro was changing hands at $1.2016 against 1.2062 late on Monday in New York, 134.72 yen (134.39), 0.6915 pounds (0.6904) and 1.5604 Swiss francs (1.5624). The dollar stood at 112.17 yen (111.41) and 1.2987 Swiss francs (1.2953).

The pound was being traded at $1.7373 (1.7464), 194.87 yen (194.60) and 2.2565 Swiss francs (2.2622). On the London Bullion Market, the price of an ounce of gold fell to $424.60 against $425.40 late on Monday. —AFP