Investing.com - The dollar pushed higher against the yen on Monday but gains were checked amid mounting tensions in Ukraine, while the euro weakened after the European Central Bank warned that a stronger exchange rate could prompt further stimulus measures.
USD/JPY edged up 0.14% to 101.75, pulling away from the three-week trough of 101.31 reached on Friday.
Demand for the yen continued to remain supported amid fresh fears over Ukraine as the threat of military action by Kiev against pro-Russian separatists in the east of the country mounted after a deadline for them to leave government buildings they are occupying expired.
The U.S. has indicated that it is prepared to impose more sanctions against Moscow if Russian encroachments in eastern Ukraine continue.
Meanwhile, EUR/USD was down 0.40% to 1.3828, from 1.3883 on Friday.
The euro weakened broadly after ECB President Mario Draghi said Saturday that a further rise in the euro exchange rate would trigger additional monetary easing to keep inflation from falling.
Data last month showed that the annual rate of inflation in the euro area slowed to 0.5%, well below the ECB’s target of just under 2%. The central bank kept monetary policy on hold unchanged earlier this month, but said it would consider unconventional measures if needed to prevent low inflation from becoming entrenched in the euro zone.
Sterling was almost unchanged against the dollar, with GBP/USD trading at 1.6722, while the Swiss franc slipped lower, with USD/CHF up 0.29% to 0.8784.
The Australian dollar remained supported close to five month highs, with AUD/USD edging up 0.04% to 0.9401.
The New Zealand dollar was lower, with NZD/USD down 0.39% to 0.8655, while USD/CAD dipped 0.07% to 1.0971.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, rose 0.29% to 79.79, extending its pullback from the three-week trough of 79.38 struck last Thursday.