Dollar languishes near three-week lows as traders brace for inflation data

Tuesday,   13-Apr-2021   07:59 AM (IST)

The dollar hovered near a three-week low against major rivals on Tuesday, pressured by lower Treasury yields as traders awaited highly anticipated U.S. inflation data later in the global day. The greenback has retreated along with U.S. yields this month after surging to multi-month peaks on expectations that massive fiscal stimulus coupled with continued monetary easing will spur faster U.S. economic growth and higher inflation. Retail sales figures due Thursday will also be closely watched. Boston Federal Reserve Bank President Eric Rosengren said on Monday that the U.S. economy could see a significant rebound this year thanks to accommodative monetary and fiscal policy, though the labor market still has much room for improvement. The dollar index, also known as DXY, edged slightly higher to 92.170 early in the Asian session, but still near Thursday’s low of 91.995, which was the weakest since March 23. It had rallied to a nearly five-month high of 93.439 on the last day of March. The benchmark yield was at 1.6764% on Tuesday. It had surged to a more than one-year high of 1.7760% on March 30. New supply is also a driver of yield direction this week, with the Treasury selling 30-year bonds on Tuesday, following good demand at auctions of three- and 10-year notes on Monday. The U.S. currency bought 109.49 yen, after slipping below 109 last week for the first time since March 25. In cryptocurrencies, bitcoin traded slightly higher at $,60373.50, closing the gap to the record high of $61,781.83 reached a month ago.