Dollar at multi
A picture illustration of Euro banknotes and coins taken in central Bosnian town of Zenica, April 26, 2014. EUTERS/Dado Ruvic
The dollar index last traded at 87.027 .DXY after shedding 0.3 percent, recoiling from a four-year peak of 87.406 set on Monday. Against the yen, the greenback stood at 113.53, off Monday's seven-year high of 114.21.
The euro bounced to a high of $1.2577 from a two-year low of $1.2439. It last traded at $1.2548.
Providing an excuse for some short covering in the euro was a Reuters article that quoted European Central Bank sources as saying colleagues of ECB Chief Mario Draghi were unhappy with his 'secretive management style and erratic communication'.
Some were particularly angered that Draghi had set a target for increasing the ECB's balance sheet immediately after the governing council explicitly agreed not to make any figure public.
'In essence, the report has cast doubt that Mario Draghi's colleagues will follow along with his easy money policies in the near term,' analysts at CitiFX wrote in a note to clients.
'This supported a 60-pip rally in EURUSD towards 1.2580 and influenced bearish sentiment for equity markets globally.'
The ECB meets on Thursday and is expected to hold off on fresh policy action.
The euro also gained on the yen, reaching a seven-month high of 142.63 yen, before steadying at 142.45.
The Antipodean currencies were among the best performers overnight led by the New Zealand dollar, which was further boosted by upbeat local data.
The kiwi climbed as far as $0.7830, pulling well away from a 15-month trough of $0.7698 plumbed on Monday, after the jobless rate fell to its lowest in over five years.
Markets shrugged off other data showing subdued wages growth, which suggested there is no urgency for the Reserve Bank of New Zealand to resume lifting interest rates.
It's Australian counterpart also fared well, popping back to $0.8742 from Monday's low of $0.8644.
Later in the session, investors will take their cues from a private survey on China's services activity and a speech by Bank of Japan Governor Haruhiko Kuroda.
(Editing by Diane Craft)
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