WASHINGTON (dpa-AFX) - After scoring strong gains against most major currencies in the previous session, the U.S. dollar retreated on Tuesday amid fresh concerns about outlook for global growth and on uncertainty about a significant progress in U.S.-China trade talks.
The threat of additional tariffs by the United States against some European Union goods added to the pressure. The U.S. government said it plans to slap tariffs on $4 billion of additional EU goods as part of the long-running spat over aircraft subsidies.
Meanwhile, the euphoria over the decision of the U.S. and China to resume trade negotiations and to not impose fresh tariffs on each other's goods for now subsided a bit after U.S. President Donald Trump commented that any trade deal with China need to be somewhat tilted in favor of the United States.
The dollar index, which dropped to a low of 96.60, recovered to around 96.75 later on in the session, but was still languishing in negative territory, losing about 0.07% from previous close.
Against the euro, the dollar weakened to 1.1323 but recovered subsequently on support at lower levels and was last seen moving around 1.1290, down marginally from previous close.
In eurozone economic news, data from Eurostat showed that Eurozone producer price inflation slowed for the third consecutive month in May, rising 1.6% year-on-year, after rising 2.6% a month earlier. Economists had expected a 1.8% rise in inflation.
In Germany, retail sales grew at a slower pace of 4% in May, after increasing by 4.6% in the previous month.
According to reports, the ECB is unlikely to cut rates at the monetary policy meeting this month. A report in Bloomberg, citing officials, says the policymakers see no need to rush into July rate cut.
However, policymakers are likely to change its language to signal additional stimulus forthcoming sooner rather than later.
The British Pound Sterling, which edged up marginally earlier in the day, weakened as the session progressed, with a unit of sterling fetching $1.2593, about 0.35% less than previous close of $1.2638.
The yen strengthened to 107.76 by noon, but gave up some gains subsequently and was up 0.5% at 107.90 a dollar.
The Aussie gained in strength against most major currencies. Against the greenback, it was up 0.33% with the AUD-USD pair trading at 0.6989.
The Reserve Bank of Australia today slashed its key interest rate by a quarter point for the second month in a row, taking it to a new record low.
The board of the Reserve Bank of Australia, governed by Philip Lowe, cut the cash rate to 1% from 1.25%. The bank had reduced its rate by 25 basis points in June.
'This easing of monetary policy will support employment growth and provide greater confidence that inflation will be consistent with the medium-term target,' the bank said in a statement.
Policymakers noted that the reduction will help make further inroads into the spare capacity in the economy.
Against Swiss franc, the U.S. dollar was down 0.14% at 0.9863 and against the loonie it was down 0.17% at 1.3113.
Copyright RTT News/dpa-AFX
© 2019 AFX News
