Investing.com – The U.S. dollar fell on Tuesday after reports that President-elect Donald Trump's tariffs may be less aggressive, heading for a one-week low while ahead of key inflation data. The euro rose.
At 4:25 a.m. ET, the dollar index against a basket of six other currencies was trading 0.3% lower at 107.775, after falling overnight to its lowest since Dec. 30. It was done.
The dollar continues to be at a disadvantage
The dollar has been weak since the Washington Post published a report on Monday that the new Trump administration is considering plans to limit tariffs on areas deemed critical to U.S. national and economic security. It's in
President-elect Donald Trump denied the report in a post on his platform Truth Social, but the dollar remains sluggish.
“The failure of the dollar to recover all of its intraday losses on Monday is probably indicative of two factors. First, the market was heavily favoring the dollar following almost three consecutive months of gains. “Second, there is no smoke without fire, and the Washington Post's reporting sounds sensible,” ING analysts said in a note.
On Tuesday, there will be plenty of U.S. economic data to digest, including for December and November, ahead of a closely watched Friday's announcement that could provide further clarity on the health of the world's largest economy.
ING said, “While it is unlikely that investors will want to actively sell the dollar ahead of President Trump's inauguration on January 20 due to speculation regarding tariff easing, it is unlikely that investors will want to actively sell the dollar due to speculation regarding tariff easing, but in the meantime, their currency positions will become more balanced. There is a possibility that the dollar will strengthen a little more,” he added. .
Euro gains on inflation data
In Europe, the index rose 0.4% to 1.0431, rising again after hitting a one-week high on Monday.
On Tuesday, attention will turn to the release of the latest inflation data outside the euro area, the last data on intra-regional prices before the European Central Bank's next meeting (January 30).
The annual rate of increase is expected to be 2.4% in December, accelerating from 2.2% in November.
However, figures released by Spain and Germany showed inflation rising faster than expected, while France's rate fell unexpectedly.
Investors currently expect the ECB to cut interest rates by around 100 basis points in the first half of 2025, but any signs of further easing in inflation could give the ECB more room to ease policy and reduce the weight of the single currency. It will be a while.
It traded 0.4% higher at 1.2569 after an overnight jump, despite data showing UK house prices unexpectedly fell last month for the first time since March.
Mortgage lender Halifax said it fell 0.2% in December after rising 1.2% in November, but rose 3.3% for the year, below expectations of 4.2%.
Last month, interest rates were left unchanged after consumer prices exceeded the target, but further interest rate cuts are expected to proceed cautiously this year.
RMB remains weak
In Asian markets, the Chinese currency continued to underperform, rising 0.1% to $7.3325, hitting a 17-year low on Monday.
Although the currency recovered to some extent, it remained vulnerable due to the rise of the United States. Restrictions on Chinese companies are adding to pressure on the currency.
After hitting a six-month high earlier, it fell slightly to 157.56.
