By Gina Lee
Investing.com – The dollar was up on Tuesday morning in Asia, but near a three-week low as investors await the U.S. consumer price index (CPI) for March, due later in the day.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies edged up 0.16% to 92.293 by 13:03 AM ET (5:03 AM GMT).
The USD/JPY pair was up 0.32% to 109.72.
The USD/CNY pair edged up 0.11% to 6.5515. Chinese trade data released earlier in the day said that exports grew 49% year-on-year in March. Imports grew 38.1% year-on-year and the trade balance stood at USD116.35 billion.
The GBP/USD pair inched down 0.09% to 1.3728.
“The dollar index has been slipping in recent days but should find stability with the U.S. macro outperformance narrative set to get a strong airing” in data this week, Westpac strategists said in a note, which also forecasts a rally toward 94.500.
“Treasury issuance is surging at the same time as inflationary pressures show in the data, which should lift the U.S. dollar,” and 10-year Treasury yields are expected to rise toward the top of its recent 1.6-1.755% range in the coming week, the note added.
U.S. Treasuries slowly climbed up on Tuesday, with the benchmark 10-year note yield at 1.6764%. Auctions of three- and 10-year notes on Monday saw decent demand, while 30-year notes will go under the hammer later in the day.
“How Treasury yields react to this week’s supply and to key U.S. data releases will undoubtedly provide direction for the USD in the near-term… a strong (CPI) print may re-invigorate inflation fears and lend support to the dollar, ” Rabobank currency strategist Jane Foley said in her own note.
Foley also forecasts the greenback to trade “choppily” in a $1.17 to $1.20 range versus the euro. It is currently at $1.1904, near its weakest level since Mar. 23.
Boston Federal Reserve Bank President Eric Rosengren also said on Monday that the U.S. economy could see a significant rebound in 2021 thanks to accommodative monetary and fiscal policy, though the labor market still has much room for improvement.
Dollar Up but Near Three-Week Low as Investors Await U.S. CPI Figure
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