Dollar ends little changed on Fed taper uncertainty

The greenback surrendered its initial gains made but climbed to a near 3-month high versus the yen on rising U.S. Treasury yields where the benchmark 10-year hit a 3-month peak of 1.516% and ended the day little changed against majority of its peers as investors remained uncertain of when the Federal Reserve would begin tapering its asset purchases.  
  
Reuters reported the U.S. economy is close to having met the Federal Reserve's bar for beginning to reduce its bond purchase program and will meet it soon if job gains continue, Chicago Fed President Charles Evans said on Monday, the latest policymaker to back the central bank's step away from pandemic-era crisis policies.    "I see the economy as being close to meeting the 'substantial further progress' standard we laid out last December," Evans said in prepared remarks to the National Association for Business Economics annual conference in Virginia. "If the flow of employment improvements continues, it seems likely that those conditions will be met soon and tapering can commence."  
  
Versus the Japanese yen, although dollar met renewed selling at 110.80 in Asian morning and dropped to session lows at 110.54. However, the pair then erased its losses and rose in tandem with U.S. yields to an 11-week peak at 111.06 ahead of New York open. Dollar later retreated to 110.79 before staging a rebound to 111.03 in New York afternoon.  
  
The single currency moved sideways in New Zealand and Asia before falling to session lows at 1.1685 in European morning on dollar's strength together with cross-selling of euro especially vs sterling. The pair then staged a short-covering rebound to 1.1710 ahead of New York open before trading sideways.  
  
The British pound traded inside a narrow range in Asia and briefly spiked down to session lows at 1.3659 at European open. The pair then jumped in Europe to 1.3710 on cross-buying of sterling especially vs euro and then ratcheted higher to an intra-day high at 1.3728 in New York morning before retreating on profit-taking.  
  
On the data front, further news from Reuters on new orders and shipments of key U.S.-made capital goods increased solidly in August amid strong demand for computers and electronic products, keeping business spending on equipment on track for another quarter of robust growth.     Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose 0.5% last month, the Commerce Department said on Monday.     Data for July was revised higher to show these so-called core capital goods orders gaining 0.3% instead of the previously reported 0.1%. Economists polled by Reuters had forecast core capital goods orders increasing 0.4%.  
  
Data to be released on Tuesday:  

Australia retail sales, Germany Gfk consumer sentiment, France consumer confidence, Canada average weekly earnings, U.S. good trade balance, wholesale inventories, redbook, monthly home price, consumer confidence and Richmond Fed manufacturing.