Dollar treads water as Ukraine headlines fuel caution

Euro, Hong Kong dollar, U.S. dollar, Japanese yen, pound and Chinese 100 yuan banknotes are seen in this picture illustration, January 21, 2016. REUTERS/Jason Lee/Illustration/File Photo

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LONDON, Feb 17 (Reuters) – The U.S. dollar treaded water on Thursday and the Japanese yen held on to its earlier gains after a Russian news report of mortar fire in eastern Ukraine jangled market nerves and boosted the appeal of safe haven bets.

Russia-backed rebels accused Ukrainian forces of shelling their territory in violation of agreements aimed at ending conflict in the contested Donbass area, the RIA news agency said, a report later denied by Ukraine. read more

While the greenback retreated from its Asian highs after the news broke, investors remained wary that Russia will invade the Ukraine again despite rising optimism at the start of this week that a diplomatic solution would be found to prevent…

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