Dollar gains slightly from six-week low; euro slips ahead of ECB meeting
The U.S. dollar edged higher Tuesday, but remained near its six-week low as uncertainty of trade policies raised doubts about the outlook for the U.S. economy, while the euro slipped slightly ahead of key inflation data.
At 04:10 ET (08:10 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, gained 0.2% to 98.855, after falling to its lowest since late April 22 at the start of the week.
Trade tensions weigh on U.S. economy
The Trump administration is urging countries to present their most favorable trade proposals by Wednesday, according to a report from Reuters, citing a draft letter to negotiating partners.
However, U.S. duties on imported steel and aluminum are also set to double to 50% on Wednesday, an indication that tough times likely lie ahead for the U.S. economy.
In Europe, EUR/USD traded 0.2% lower to 1.1415, after briefly touching a six-week high, ahead of the release of the flash eurozone inflation figures for May.
GBP/USD traded 0.2% lower at 1.3518, with sterling staying supported as the Bank of England remains cautious with its interest rate cuts as inflation remains elevated.
Data released Monday showed that U.K. house prices rose more than expected in May, climbing 3.5% year-on-year, according to data from mortgage lender Nationwide.
On a monthly basis, prices increased by 0.5%, reversing most of April’s decline and marking the largest monthly gain since December.
In Asia, AUD/USD fell 0.6% to 0.6460 after the minutes of the Reserve Bank of Australia’s May meeting largely reiterated the central bank’s dovish stance.
USD/JPY traded 0.1% higher to 142.88, with the Japanese yen handing back some of its safe haven demand gains, while USD/CNY dropped 0.1% to 7.1906, after a long weekend.
Recent purchasing managers index readings signaled persistent weakness in the Chinese economy, as Caixin manufacturing PMI data showed an unexpected contraction in May, in line with government PMI data released over the weekend.
The reading showed export orders for Chinese goods were stalling amid high U.S. tariffs.
Source: Reuters
