The greenback jumped during the Tuesday session as the investors remained watchful on the outcome of the Federal Reserve meeting for the month of March and as the market remained doubtful on the mixed signals regarding the interest rate hike this year.
Last Monday, the U.S. dollar slumped against a basket of currencies as the currency was highly affected by the comments of the Federal Reserve Chairwoman Janet Yellen that the Fed will push the interest rate hike for this year. The dollar index almost hit its 5-1/2-low of 94.319 when it closed at 94.551, down by 0.07 percent.
Earlier today, USD/JPY went down 0.80 percent and the pair hit its 17-month low of 110.45. Relatively, the lower the interest rate is, the less attractive the dollar becomes to the yield seeking investors. The US. Dollar index significantly increased 0.14 percent at 94.72.
Additionally, the U.S. currency found support as the demand for safe-haven assets soared after the data leaked from the Mossack Fonseca law firm. The soon to be released data on non-manufacturing composite is also one of the factors which could drive strength to the dollar.
On the contrary, the upbeat U.S. job data and the non-farm payrolls report last Friday pushed the greenback lower.
Elsewhere, the Bank of Japan is speculated to lower the monetary policy rate on their meeting this April 27-28 as the slower economic growth could drive the inflation higher. However, a report was released on Tuesday morning, whereas it was disclosed that the bank could possibly choose to cut interest rate and then add asset purchases.
A person familiar with the matter explained that it will be a question of whether the BOJ feels it has forestalled risks in January or whether they feel that January’s action was enough.
BOJ Governor Haruhiko Kuroda said that they need to take a comprehensive look at various factors in deciding at the time, including market moves, particularly in Japan.
Meanwhile, EUR/USD traded at 1.1364, down by 0.23 percent and the AUD/USD lost 0.72 percent to change hands at 0.7551. NZD/USD was down 0.88 percent to trade at 0.6773 while the USD/CAD jumped by 0.36 percent at 1.3134. The greenback edged higher as well against its Bristish counterpart as GBP/USD slumped 0.35 percent to trade at 1.4211.
The Reserve Bank of Australia announced that the interest rate will be unchanged at 2 percent and yet might push for another rate cut in the coming months. Alongside with this, the trade deficit of Australia went up for A$3.410 billion for the month February.
In other news, the gold futures for June delivery on the Comex division of the New York Mercantile Exchange jumped at $1,236.90 per troy ounce, gaining $17.60 or 1.44 percent. Silver futures for May delivery went up 1.75 percent at $15.20 per troy ounce, while the copper futures lost 0.6 cents to trade at $2.135 per pound.
Oil prices remained on the downside after the weak demand on U.S. gasoline and as the major oil producers were being indecisive on the proposed freezing of output. Brent futures tumbled 8 cents to $37.61 per barrel while the U.S. crude lost 27 cents to trade at $35.43 per barrel.
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