SYDNEY  — The dollar struggled to regain its poise on Wednesday after the Trump administration accused Germany, Japan and China of devaluing their currencies to gain a trade advantage, adding to a risk-off mood that also kept stocks subdued.

The US currency suffered its worst January in three decades after President Donald Trump complained that every "other country lives on devaluation".

Just hours earlier, his top trade adviser said Germany was using a "grossly undervalued" euro to exploit its trading partners. The accusations drew rebuttals from German and Japanese officials, but looked likely to run for some time.

"Suspicions that Washington may increasingly focus on the value of the dollar were catapulted into the limelight," ANZ analysts said in a note.

"The early policy implication is that dollar competitiveness could have a prominent role to play in Trump’s ’America First’ agenda."

The dollar did recoup some of its losses as the Asian session wore on, edging up to 113.17 yen from a low of 112.08, though that remained well short of Monday’s 115.01 peak.

The euro was firm at US$1.0793, having been as high as $1.0812 and a long way from Monday’s trough of $1.0617. Against a basket of currencies, the dollar inched up 0.2 per cent to 99.703, having ended January with a loss of 2.6 per cent.

Japanese investors seemed relieved the yen did not rise even further and nudged the Nikkei up 0.5 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.1 per cent in a quiet session.

Spread betters were tipping a modest early bounce for European bourses, while E-mini futures for the S&P 500 ESc1 were 0.1 per cent firmer.

FED ON HOLD

Chinese markets were still on holiday but surveys from the Asian giant showed manufacturing and services activity continued to expand in January.

Exports from tech bellwether South Korea also grew at the fastest pace in almost five years, another sign the global economy had been on the mend before all the talk of US protectionism darkened the air.

Investors’ hopes for a fiscal boost to the world’s largest economy under Trump have been tempered by controversial and protectionist policies that have seen him suspend travel to the United States from seven Muslim-majority countries.

The policy uncertainty only added to expectations the US Federal Reserve will keep interest rates steady when it concludes a two-day meeting later Wednesday.

The setback for Wall Street has been limited so far.

While the S&P 500 fell on Tuesday for a fourth consecutive session, it still ended higher for the month. The Dow dipped 0.54 per cent, while the S&P 500 lost 0.09 per cent and the Nasdaq 0.02 per cent.

Apple shares jumped 3.3 per cent after the bell as sales of iPhones beat expectations, helping lift Nasdaq e-mini futures up 0.3 per cent.

The retreat in the dollar also boosted a range of commodities, with copper near two-month highs.

Oil was weighed down by ongoing high supplies despite an OPEC-led production cut, though prices remained within a narrow trading band. Brent crude oil for April eased 15 cents to $55.43, while US crude lost 8 cents to $52.73.  — REUTERS