Dollar recovers ground, steadies against yen as market frenzy eases

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NEW YORK, Aug 6 - The dollar recovered ground against most major peers on Tuesday and the Japanese yen steadied around seven-month highs against the U.S. currency, as some of the more striking moves of recent days reversed somewhat and a semblance of calm returned to markets.

"I wouldn't be surprised if the volatility in the market isn't over yet, but ,clearly, the very substantial moves we had yesterday have somewhat normalized," said Axel Merk, president and chief investment officer of Merk Investments. "It looks as if some of the moves over the last couple of days were overdone," Karl Schamotta, chief market strategist at Corpay.

The carry trade unwind combined with softer-than-expected U.S. job data on Friday, and disappointing earnings from major tech firms triggered a global equity sell-off, further reinforcing the unwind. Also underpinning currency market moves are traders' attempts to price U.S. Federal Reserve policy in the coming meetings.

The Australian dollar was last up 0.55% at $0.6533, after comments from Reserve Bank of Australia Governor Michele Bullock, who suggested rate cuts were still far away.

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