The U.S. dollar fell against its major counterparts in the European session on Tuesday, along with treasury yields, after a data showed that the nation's core inflation rose less-than-expected in March, reducing concerns over a more aggressive tightening of monetary policy by the Federal Reserve.
Data from the Labor Department showed that core consumer prices, which exclude food and energy prices, edged up by 0.3 percent in March after rising by 0.5 percent in February. Economists had expected another 0.5 percent increase.
The consumer price index surged by 1.2 percent in March after climbing by 0.8 percent in February. The sharp increase in consumer prices matched economist estimates.
The annual rate of consumer price growth accelerated to 8.5 percent in March from 7.9 percent in February, showing the fastest growth since December 1981.
Core consumer prices were up 6.5 percent year-over-year in March, reflecting an uptick from the 6.4 percent jump in February. The annual growth represents the biggest increase since August 1982.
Chicago Federal Reserve Bank President Charles Evans said on Monday that high price pressures would persist longer than thought and 50 basis-point rate hikes would be needed to reach a neutral range by December.
Evans, however, cautioned that not going too far too quickly is crucial for optionality going forward.
The currency rose against its major counterparts in the Asian session, except the franc.
The greenback was down against the franc, at a 1-week low of 0.9287. At yesterday's trading close, the pair was quoted at 0.9306. Should the greenback drops further, 0.90 is likely seen as its next support level.
The greenback edged down to 124.76 against the yen from Monday's close of 125.34. The greenback is seen finding support around the 122.00 region.
The greenback dropped to 1.0904 against the euro, from a 4-day high of 1.0851 seen at 8:15 am ET. The pair was worth 1.0884 when it closed deals on Monday. If the greenback weakens further, 1.10 is possibly seen as its next support level.
Survey results from the ZEW - Leibniz Centre for European Economic Research showed that German economic confidence weakened further in April but at a slower-than-expected pace.
The ZEW Indicator of Economic Sentiment fell to -41.0 in April from -39.3 in March. However, economists had forecast the index to decline more sharply to -48.0.
The greenback that ended yesterday's trading at 1.3029 against the pound weakened to 1.3054. The greenback may challenge support around the 1.32 mark.
Data from the Office for National Statistics showed that the UK unemployment declined in three months to February and job vacancies rose to a new record high.
The jobless rate fell 0.2 percent points from the previous quarter to 3.8 percent in three months to February. The rate came in line with expectations.
After climbing to nearly a 4-week high of 1.2662 at 4:15 am ET, the greenback declined to 1.2581 against the loonie. The greenback was trading at 1.2626 against the loonie at yesterday's close. Next key support for the greenback is likely seen around the 1.22 level.
Following a 3-week high of 0.7399 hit at 9:15 pm ET, the greenback moved down to a 4-day low of 0.7483 against the aussie. The greenback was worth 0.7415 per aussie at Monday's New York session close. On the downside, 0.78 is possibly seen as its next support level.
Survey results from NAB showed that Australia business conditions and confidence improved in March.
The business conditions index doubled to 18 in March from 9 in the previous month. This was the largest one-month jump since June 2020.
The greenback slipped to a 4-day low of 0.6883 against the kiwi, after a rise to nearly a 4-week high of 0.6806 in the Asian session. At Monday's close, the pair was valued at 0.6822. The greenback is likely to find support around the 0.70 level.
U.S. monthly budget statement for March is scheduled for release in the New York session.
