The dollar was little changed in choppy dealing versus most other majors Tuesday morning in New York as traders tried to get a handle on another mixed bag of corporate earnings results. With little first-tier economic data to consider, attention will likely turn to Wall Street to see whether stocks extend their big losses from the previous session.
Fear that the recent bear market rally has petered out fueled increased risk aversion on Monday, driving the dollar higher against the euro but sharply lower against its Japanese counterpart.
Treasury Secretary Tim Geithner is expected on Capitol Hill for a hearing on oversight of the government's $700 billion bailout program at 10 a.m. ET.
There are no key economic reports due to released on Tuesday. Reports due later in the week include the Commerce Department's durable goods orders report and industry data on existing homes sales.
The dollar consolidated its recent gains versus the euro Tuesday morning, holding near yesterday's monthly high of 1.2887. Approaching mid-morning, the dollar was trading at 1.2950.
The Center for European Economic Research, or ZEW, said in a report that its economic sentiment index for Germany rose to 13 in April from minus 3.5 in March. Meanwhile, economists had expected the index to rise to 2. The indicator marked a positive reading for the first time since July 2007.
After coming under pressure in very early dealing versus the sterling, the dollar was able to find its footing and was down only slightly from yesterday's 3-week high of 1.4467. Nearing 8 am ET, the buck was trading at 1.4525.
A report from the Office for National Statistics said UK's annual inflation in March eased to 2.9% from 3.2% in February. The annual rate came in line with economists' expectations and reached the lowest since March 2008. The largest downward contribution to the change in the CPI annual rate came from housing and household services.
The dollar was stable versus the yen Tuesday morning after falling below a recent trading range yesterday. The buck fetched 98 yen in early dealing, an improvement from Monday's 3-week low of 97.64. With traders betting the dollar was overbought following a run to a 3-month high of 101.43 earlier this month, traders are turning to the yen as a value hedge play.
Commodity prices stabilized Tuesday morning after falling sharply Monday on renewed concerns about global demand. As such, the dollar leveled off against resource-linked currencies like the loonie. Approaching mid-morning, the dollar was near 1.2400, having snapped back from last week's 3-month low of 1.1982.
Later this morning, the Bank of Canada makes its latest interest rate decision. Economists expect the BoC to hold steady at 0.5 percent.
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