The U.S. dollar was weak against most of its major counterparts on Tuesday, weighed down by a drop in U.S. Treasury yields and on Treasury Secretary Janet Yellen’t comments about availability of tools to rein in inflation.
Yellen said in an interview on Monday that the proposed $1.9 trillion coronavirus aid package will help the economy to return to full employment by next year. In the event of inflation turning out to be a problem, “there are tools to address that,” she added.
The bill is likely to be passed by Sunday before the current expanded unemployment benefits run out.
The dollar index, which slid to 91.91 in the European session, continued to stay weak and was last seen at 91.97, down 0.37% from previous close.
Against the Euro, the dollar weakened to 1.1902, losing nearly 0.5% from Monday’s close of $1.1846. Due to weak consumer spending, the euro area economy shrank at a faster than initially estimated rate in the fourth quarter of 2020, revised data from Eurostat showed on Tuesday.
Gross domestic product declined 0.7% sequentially instead of 0.6% estimated on February 16. The fall reversed a record 12.5% rebound seen in the third quarter. On a yearly basis, GDP was down 4.9%, bigger than the 4.2% decline in the third quarter but slower than the 5% drop estimated on February 16.
The Pound Sterling was stronger, fetching $1.3890 a unit, about 0.5% more from yesterday’s close of $1.3821. UK’s retail sales returned to growth last month, prompted by the prime minister’s roadmap to reopening announcement. Total retail sales grew 1% on a yearly basis in February while like-for-like sales advanced 9.5%, the British Retail Consortium said.
The Yen strengthened to 108.51 a dollar, firming up from 108.89.
The AUD-USD pair was at 0.7719 a little while ago, giving the Aussie a gain of nearly 1%.
The Swiss franc was firmer at 0.9282 a dollar, gaining from 0.9362 a dollar, while the Loonie was stronger at 1.2642 a dollar, compared to 1.2665 a dollar on Monday.
The material has been provided by InstaForex Company – www.instaforex.com