Forex – Dollar Steady near 4-Month Highs, Euro Struggles
Investing.com – The dollar was hovering just below four month highs against a currency basket on Tuesday amid indications that the U.S. economy remains on track, while the euro remained below the $1.19 level as concerns over economic headwinds weighed.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was almost unchanged at 92.63 by 03:19 AM ET (07:19 AM GMT), within close reach of Monday’s highs of 92.82, the most since December 26.
Demand for the dollar continued to be underpinned as rising U.S. Treasury yields and broadly solid economic data has underlined expectations for a steady pace of interest rate increases by the Federal Reserve this year.
The euro remained on the back foot a day after falling below the $1.19 level for the first time this year.
EUR/USD was last at 1.1927, not far from Monday’s lows of 1.1896, which was the weakest level in four months.
The euro showed little reaction after data showing that German industrial output rose more than expected in March. The report helped ease concerns that the euro area’s largest economy is facing headwinds from rising protectionism.
Data on Monday had shown that German industrial orders dropped for a third month running in March.
A recent soft patch of euro zone economic data has given rise to speculation that the European Central Bank may not be able to end its asset purchasing stimulus program in September, as some investors had expected.
The dollar edged lower against the traditional safe haven yen, with USD/JPY dipping 0.11% to 108.96, off an overnight high of 109.13.
Investors were keeping an eye on geopolitical developments, ahead of an announcement by U.S. President Donald Trump later in the day about the future of an international nuclear agreement with Iran, which he has repeatedly threatened to withdraw from.
The pound was fractionally higher, with GBP/USD edging up to 1.3568.
Meanwhile, the Australian dollar was flat, with AUD/USD at 0.7516, after falling as low as 0.7490 overnight.
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