The dollar has slipped against its major rivals ahead of the release of US productivity and costs data for the first quarter of the year.

Against the yen, the American currency traded at 121.34, also hitting £1.9966 against the sterling.

This morning is set to see the release of a key economic report which will indicate the efficiency of the labour market and highlight costs data.

Forecasters are predicting that productivity growth will slow to one per cent from earlier estimates of 1.7 per cent. Last year's fourth quarter saw productivity and costs figures come in at 2.1 per cent.

Meanwhile, Bloomberg is predicting that Japan's currency may gain against the dollar as concern mounts that Asian and British banks will raise their interest rates in the coming months.

Mark Meadows, currency trader at Tempus Consulting, told Bloomberg: "There's still a very high correlation between the yen and the US equity market, which is a proxy for risk appetite."

AFX News forecasts that the data will show productivity growth to have slowed to 1.5 per cent, which may impact upon the nation's currency.