The dollar nursed heavy losses early on Tuesday, having suffered its biggest one-day fall in a year as it reversed almost all of its U.S. payrolls-inspired gains in a temporary setback for dollar bulls.
The euro rebounded to $1.2652 from a two-year trough near $1.2500 set on Friday, while sterling clawed back to $1.6075, after hitting an 11-month low of $1.5943. The Canadian dollar firmed to C$1.1140 per USD from C$1.1271 on Friday.
Traders said the reversal was mostly due to profit-taking as U.S. Treasury yields remained stubbornly low. The two-year yield fell back to 0.535 percent, levels seen before the payrolls data. It has lost momentum since peaking at a 3-1/2-year high of 0.597 percent last month.
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