The U.S. dollar was weak against its major counterparts on Tuesday amid rising fears about inflation.
Traders were looking ahead to the consumer price inflation data for April, due on Wednesday. According to forecasts, prices may have increased by 3.6% annually last month.
St. Louis Federal Reserve President James Bullard today acknowledged the progress the economy has made but said it’s still not time to ease back the throttle on policy.
Bullard said in an interview on CNBC’s “Closing Bell” that fiscal and monetary policy help as well as aggressive vaccination efforts have helped keep growth going since the Covid-19 pandemic began in March 2020. He added that even with rising inflation ahead, the Fed should stay accommodative in its policy stance until there are clearer signs that the virus no longer poses as major a threat. That includes keeping short-term borrowing rates anchored near zero and continuing to buy at least $120 billion a month even as markets wonder when the Fed will start pulling back on those purchases.
The dollar index slipped to a low of 89.98 in the European session, but recovered gradually thereafter and was at 90.19 a little while ago, down just 0.03% from the previous close.
Against the Euro, the dollar weakened to 1.2182 before recovering to 1.2148, netting a loss of about 0.15%.
Against Pound Sterling, the greenback slipped to 1.4139, down 0.16% from Monday’s close.
The Yen was stronger at 108.66 a dollar, gaining from 108.84.
The Aussie was firmer with the AUD-USD at 0.7838, compared with Monday’s close of 0.7830.
The Swiss franc weakened to 0.9037 against the dollar, losing 0.29%, while the Loonie was up marginally at 1.2097 a dollar, thanks to higher crude oil prices.
The material has been provided by InstaForex Company – www.instaforex.com