The U.S. dollar fell more than three weeks low against a basket of currencies on Tuesday. Investors are paying attention to the U.S. employment data released later this week to understand the possible monetary policy path of the U.S. Federal Reserve (Fed). At the Jackson Hole meeting last Friday, Fed Chairman Powell said that the Fed might begin to reduce its bond-purchase plan this year, but it is not in a hurry to raise interest rates. Since then, the U.S. dollar has been trending hard.
The U.S. dollar one shrank part of its decline. Previously, the S&P/Core Logic Case-Shiller 20-major-city composite index showed that the price of single-family houses in 20 major cities in the United States in June rose to a record high compared to the same period last year. Subsequently, the U.S. dollar fluctuated. In August, the Chicago Purchasing Managers’ Index was worse than expected, which reduced the decline of the U.S. dollar. However, after the Conference Board Consumer Confidence Index fell below expectations, the U.S. dollar continued downward. Concerns about the surge in the number of new cases and rising inflation have hit the economic outlook.
Investors will pay attention to a series of U.S. economic data released later this week to gauge the labour market’s strength, and most importantly, Friday’s employment data. Investors will seek to determine when the Fed may begin to tighten the policy. Analysts said that Tuesday’s trading might also be affected by the rebalancing of the stock market portfolio at the end of the month, leading to inflows of Canadian dollars, British pounds and Swiss francs and outflows of U.S. dollars. The U.S. dollar index fell 0.065%, and the euro EUR rose by 0.12% to 1.1809 US dollars.
The U.S. dollar index was as low as 92.395 earlier, the lowest since August 6, but the monthly line still rose by more than 0.6%. Data released earlier in the day displayed that inflation in the euro area soared to a 10-year high this month, and consumer prices in 19 countries in the euro area rose 3% this month. The pound against the U.S. dollar hit a two-week high of $1.3807 at one time and reported at $1.3753 in late trading, down 0.04% on the day. In terms of cryptocurrency, Bitcoin rose 0.49% to US$47,235.84. Ether rose 4.95% to US$3,386.14. It rose to US$3,475 during the session, the highest level since May 18.