The dollar was lower against a basket of the other major currencies on Tuesday, while sterling pulled back from two-month lows hit as investors continued to fret over Brexit.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slid 0.2% to 101.72. The index has retreated since touching highs of 103.82 last week, the strongest level since 2002.
Demand for the greenback continued to be underpinned by expectations for higher interest rates this year.
The Federal Reserve raised interest rates in December and indicated that it expects to hike rates three more times in 2017.
Boston Fed President Eric Rosengren on Monday called for the U.S. central bank to step up the pace of interest rate increases, warning that inflation could overshoot its target if it does not.
Sterling edged higher after falling to two-month lows earlier amid fears that the UK won’t try to negotiate continued full access to the European single market when it leaves the European Union.
GBP/USD touched lows of 1.2106, the lowest level since October 25 before retracing losses to trade at 1.2173, up 0.12%.
The pound hit two-month lows against the euro, with EUR/USD rising as high as 0.8763, before pulling back to 0.8697.
The euro inched higher against the softer dollar, with EUR/USD edging up 0.1% to 1.0585.
The dollar fell to the day’s lows against the yen, with USD/JPY falling 0.51% to 115.42.
In emerging markets, the Mexican peso and the Turkish lira fell to fresh record lows against the greenback as political and economic woes continued to weigh.
USD/MXN was up 0.88% to 21.56 after hitting highs of 21.62 earlier amid ongoing fears over potential changes to U.S. trade policy under the incoming Trump administration.
USD/TRY climbed 1.41% to trade at 3.7658 after starting the day at 3.7135.
The selloff in the lira gathered pace after ratings agency Moody's said Monday that bank profits will be hit by an increase in bad loans this year and warned of a "general worsening" in the investment climate in Turkey.
Boston Merchant Financial Ltd is licensed by The Federal Financial Markets Service Licence Number: 1220
BMFN EAD regulated and authorised by the Financial Supervision Commission (FSC) Register. Number: RG-03-220
BMFN Pty Ltd is licensed and regulated by Australian Securities & Investment Commission (ASIC) ABN 14 145 724 509, AFSL Number 379035
BMFN PTY Ltd is registered as a Financial Service Provider and listed in the Financial Service Providers Register (FSPR), FSP328066
Noor Capital P.S.C. licensed & regulated by the Central Bank of the United Arab Emirates. Your Home for Ideal Investment Powered by BMFN.
Risk Warning: CFDs are margined products; it is possible to lose more than your initial margin deposit or credit allocation as well as any variation margin that you may be required to deposit from time to time. Therefore you should only speculate with money that you can afford to lose. CFD trading may not be suitable for all customers; therefore please ensure that you fully understand the risks involved and seek independent advice if necessary and prior to entering into such transactions. When trading CFDs with Boston Merchant Financial you are merely trading on the outcome of a financial instrument and therefore do not take delivery of any underlying instrument, nor are you entitled to any dividends payable or any other benefits related to the same. Please be advised, the services and products described on www.bmfn.com and offered by Boston Merchant Financial, Ltd. (BMFN) are not being offered within Canada, the United States or Belgium and not being offered to U.S., Canadian and/or Belgium residents or citizens, as defined under applicable law. BMFN and its products and services offered on the site www.bmfn.com are NOT registered or regulated by any U.S. or Canadian regulator and not regulated by FINRA, SEC, NFA or CFTC.
BMFN reserves the right to retroactively charge storage fees for positions held for extended period of time as stipulated by the market liquidity provider.