The U.S. dollar is getting cheaper against the euro, the yen and the pound sterling in trading on Tuesday after a strong strengthening following the previous session.
The ICE index showing the dollar’s movement against six currencies (euro, Swiss franc, yen, Canadian dollar, pound and Swedish krone) was losing 0.14% while the broader WSJ Dollar Index lost 0.27%.
The euro/dollar pair is trading at $1.0744 as of 8:20 a.m., up from $1.0726 at the close of the previous session.
The pound is at $1.2054, up from $1.2018 the day before.
On Monday the euro fell by 0.7% against the dollar, while the pound gained 0.3%. The U.S. currency was bolstered by strong U.S. labor market statistics for January, which showed that the Federal Reserve (Fed) still has enough room to maneuver in terms of further tightening monetary policy.
Rafael Bostic, president of the Federal Reserve Bank (Fed) of Atlanta, told Bloomberg on Monday that the Fed may have to raise rates higher than previously expected because economic activity in the U.S. is slowing weakly. “It’s going to mean we’re going to have to do a little bit more work,” Bostick said. – And I believe the Fed will have to raise the rate higher than I’m currently forecasting.”
Traders are waiting for more signals from Federal Reserve (Fed) Chairman Jerome Powell, who will speak at the Economic Club in Washington on Tuesday.
The dollar fell to 132.12 yen against 132.65 yen at the close of previous trading.
The yen weakened more than 1% against the dollar on Monday after the Nikkei newspaper reported that the Japanese government is offering the post of the central bank head to the current deputy Haruhiko Kuroda, who is retiring in April.
Masayoshi Amamie has been Kuroda’s deputy since 2018 and is considered one of the authors of the Bank of Japan’s ultra-soft policy. Experts believe that his appointment as head of the Central Bank increases the chances of preserving the current approach of the Japanese regulator to monetary policy, notes Bloomberg.
