The dollar remained at a level close to one-week low against the yen as the market paused in anticipation of the US trade data ready to be released today. The median analyst forecast expects the US current account deficit to shrink to $54.00 billion in November as compared to a record $55.46 billion in October.

Now the dollar is trading at $1.3135 against the euro and at 103.10 yen per dollar.

The greatest impact on the forex market came from the remarks of the European Central Bank’s chief economist Otmar Issing who insisted that the Asian governments should allow their currencies to appreciate against the dollar as they are better suited to bear the brunt of the dollar strength.

“On the question of foreign exchange rates, the adjustment at the European level is complete and has also gone too far. The key to solving this... is in Asia and principally China,” Mr Issing said.

“Europe is sharing an unfair portion of the effect of the dollar’s decline, and Asia is not doing its fair share,’” said Robert Rennie, a currency strategist at Westpac Banking Corp.

The remarks most affected the rate of the yen, although Mr. Issing probably targeted the Chinese yuan that is pegged to the dollar. Market participants expect that the increased pressure on the Chinese government to abandon its currency peg may lead to China more aggressively moving forward to the yuan revaluation.

``The Europeans are joining in the chorus to put pressure on the Chinese,’’ said Chia Woon Khien, a senior market strategist in Singapore at DBS Group Holdings Ltd. ``If there’s so much pressure, then it’ll become a no-choice situation’’ for China.