The dollar nursed losses against the yen and euro early on Tuesday, but held onto gains versus the Australian, Canadian and New Zealand currencies which succumbed to weakness in commodity prices.
The Aussie was hit particularly hard as investors turned defensive ahead of a policy review by the Reserve Bank of Australia (RBA), which is under growing pressure to temper the currency's strength. "Interest will be on the RBA's comments regarding the latest AUD appreciation," said Joseph Capurso, senior currency strategist at Commonwealth Bank.
The Aussie surged more than 7% last month - its biggest in over four years - to a high not seen since mid-2015. It has since retreated to US$0.7600, from the high of US$0.7723.
The Aussie's rally in part reflected a broadly declining greenback as the head of the Federal Reserve signalled caution in tightening policy.
Fed funds futures now have barely one rate hike priced in for this year. Unsurprisingly, the dollar has struggled against that backdrop.
Yet Boston Fed President Eric Rosengren on Monday warned that the interest rate futures market could be "too pessimistic", noting external risks to the U.S. economy seemed to be abating.
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The Aussie was hit particularly hard as investors turned defensive ahead of a policy review by the Reserve Bank of Australia (RBA), which is under growing pressure to temper the currency's strength. "Interest will be on the RBA's comments regarding the latest AUD appreciation," said Joseph Capurso, senior currency strategist at Commonwealth Bank.
The Aussie surged more than 7% last month - its biggest in over four years - to a high not seen since mid-2015. It has since retreated to US$0.7600, from the high of US$0.7723.
The Aussie's rally in part reflected a broadly declining greenback as the head of the Federal Reserve signalled caution in tightening policy.
Fed funds futures now have barely one rate hike priced in for this year. Unsurprisingly, the dollar has struggled against that backdrop.
Yet Boston Fed President Eric Rosengren on Monday warned that the interest rate futures market could be "too pessimistic", noting external risks to the U.S. economy seemed to be abating.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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