The dollar was up slightly against a basket of other major currencies on Tuesday. Meanwhile, the euro paused after rallying to more than three-year highs.
The U.S. dollar index measures the greenback’s strength against a trade-weighted basket of six major international currencies. It rose 0.19 percent to 30.29 by 03:19 AM ET (08:19 AM GMT). This followed its new record of three year low of 90.05 on Monday.
A huge factor that caused weakness to the dollar was recent views that global economic recovery will outperform U.S. growth. Speculations led to a conclusion that such events will prompt other central banks, led by ECB, to start unwinding loose monetary policy faster than expected.
EUR/USD slipped to 1.2249 or 0.13 percent. It was not too far from Monday’s high of 1.2296, its strongest recorded level since December 2014.
Euro took a breather as speculations that the European Central Bank (ECB) could scale back its monetary stimulus arose. This claim was supported by ECB Governing Council member Ardo Hansson statement.
According to Hansson, there is a possibility that the bond purchases will end in just one step in September if the economy and inflation continue down the now expected development.
On the other hand, the dollar rose against the yen with USD/JPY at 110.69, up 0.14 percent. It was able to pull back from Monday’s four-month low of 110.32.
There was little change in the Sterling against the dollar. GBP/USD was steady at 1.3785 but was below Monday’s peaks of 1.3819. This was the highest rate recorded since the announcement of Britain’s vote to exit the European Union in June 2016.
The UK is expected to release December inflation data later in the day. It was expected to show that the squeeze on the cost of living is lessening.
Aussie and Kiwi during Late Trade
The Australian dollar was little changed against its U.S. counterpart on Tuesday. On the other hand, the New Zealand dollar was lower following a release of downbeat local data. Another thing that factored in on the drop was the mild recovery of the greenback from its recent losses.
AUD/USD held steady at 0.7964, slightly off the recorded four-month high of 0.7978 during the previous session.
NZD/USD fell to 0.7284, went down by 0.22 percent following its new record of four-month high on Monday at 0.7315.
BWorldFinance is your primary source of news in the financial market, technology, and more. Visit bworldfinance.com now and get the latest happenings on the market. Register an account now and begin your investing journey!