Dollar holds overnight gains as traders focus on ECB
The dollar held on to overnight gains on Tuesday as investors weighed whether a policy shift from the European Central Bank could hit the euro, while the pound fell due to Brexit uncertainty.
The dollar rose 0.2% against its peers. Against the euro, the greenback rose to $1.1816. The Aussie climbed 0.1% to $0.7280, while the kiwi rose briefly from overnight lows.
Investors are focusing on the European Central Bank’s policy decision later in the week. Most analysts don’t expect a shift in its policy stance but are looking to get clues on inflation forecasts.
The dollar firmed against the Japanese yen amid talk of a snap election. The yen traded at $106.30 on the dollar.
The pound lost 0.8% on the dollar amid difficulties in the EU-UK trade talks. It fell marginally to 1.3162 against the dollar and neared a two-week low of 89.77 pence per euro.
Australian payrolls and business confidence figures, as well as final European GDP data, are due later in the day.
Japan’s economy contracted an annualized 28.1% in the period April to June, higher than the initial estimate of a 27.8% decline.