Mar 26 2024: In European trade on Tuesday, the U.S. dollar experienced a slight decline with limited volatility, following last week’s central bank meetings, and in anticipation of the release of crucial inflation data later in the week.
The Dollar Index, which tracks the dollar against a basket of six other currencies, traded 0.2% lower at 103.760 at 06:10 ET (10:10 GMT), reflecting a minor period of profit-taking after reaching a one-month high last week.
The greenback has been consolidating its recent gains at the beginning of this week, with trading remaining within tight ranges amidst a generally calm market environment post-central bank meetings and ahead of the Federal Reserve’s release of its preferred inflation gauge later this week.
EUR/USD rose 0.2% to 1.0854, benefiting from the dollar’s slight weakness. Meanwhile, GBP/USD also saw a 0.2% increase, reaching 1.2656, bouncing back from last week’s one-month low. European Central Bank officials hinted at potential rate cuts starting in the summer, contributing to the euro’s recovery.
In Japan, USD/JPY traded 0.1% lower at 151.29, remaining near its four-month high. Recent weakness in the yen, despite the Bank of Japan’s rate hike, has led to concerns about potential intervention by the Japanese government.
USD/CNY rose 0.1% to 7.2186, reaching its highest level since mid-November and surpassing the psychologically important 7.2 level. The yuan has faced losses due to concerns over a slowdown in the Chinese economic recovery, coupled with signals from the People’s Bank of China about potential interest rate cuts.
Overall, market attention remains focused on key economic data releases, including the Federal Reserve’s core personal consumption expenditures price index, which could influence future market trends.