NEW YORK : The dollar fell to its lowest level in more than three-weeks against a basket of currencies on Tuesday, as investors looked to U.S. jobs figures later this week for insight into the possible path of U.S. Federal Reserve monetary policy.
The greenback has struggled since Federal Reserve Chair Jerome Powell's said at the Jackson Hole conference on Friday that tapering could begin this year, but the central bank was in no hurry to raise interest rates.
"If the payrolls number disappoints, then eurodollar has another excuse to trade higher again because that is going to bring out all the doves again saying the Fed is not going to taper in September," said Erik Bregar, director and head of FX strategy at the Exchange Bank of Canada in Toronto.
The dollar briefly pared some of its decline on the session after the S&P CoreLogic Case-Shiller composite index of 20 metropolitan areas showed U.S. single-family home prices rose in June from the prior year at the fastest pace on record.
Choppiness for the greenback ensued as a weaker-than-expected Chicago PMI for August saw the dollar trim its decline, only to once again resume a downward move after the Conference Board's reading for consumer confidence fell short of expectations, weighed down by rising COVID-19 cases and higher inflation.
Investors will look to a round of U.S. data later this week to gauge the strength of the labor market, culminating with payrolls numbers due Friday, in an effort to determine when the Fed may begin tightening its policy.
"All these releases are having minor influences, but if you are looking for a big move, maybe wait until Friday," said Bregar.
Analysts said trade on Tuesday may also be influenced by month-end stock portfolio rebalancing, which could lead to flows into the Canadian dollar, sterling and the Swiss franc and out of the greenback.
The dollar index fell 0.065per cent, with the euro up 0.12per cent to US$1.1809.
The dollar hit a low of 92.395 on the day, its lowest level since Aug. 6 but is still up more than 0.6per cent for the month.
Data earlier in the day showed euro zone inflation surged to a 10-year-high this month, with consumer prices in the 19 countries sharing the euro up by 3per cent.
Sterling strengthened to a two-week high of US$1.3807, and was last trading at US$1.3753, down 0.04per cent on the day.
The Japanese yen weakened 0.04per cent versus the greenback at 109.96 per dollar.
In crytocurrencies, bitcoin last rose 0.49per cent to US$47,235.84 while ethereum last rose 4.95per cent to US$3,386.14. Ether rose to as much as US$3,475, its highest level since May 18. The cryptocurrency is up more than 30per cent for August, on pace for its biggest monthly percentage gain since April.
Currency bid prices at 2:33PM (1833 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
92.6330 92.7060 -0.07per cent 2.947per cent +92.7510 +92.3950
US$1.1809 US$1.1797 +0.10per cent -3.35per cent +US$1.1845 +US$1.1796
109.9650 109.9200 +0.04per cent +6.42per cent +110.0750 +109.5900
129.86 129.65 +0.16per cent +2.32per cent +130.1700 +129.6000
0.9151 0.9172 -0.22per cent +3.45per cent +0.9173 +0.9115
US$1.3755 US$1.3757 -0.01per cent +0.68per cent +US$1.3807 +US$1.3743
1.2606 1.2608 -0.01per cent -1.01per cent +1.2653 +1.2570
US$0.7315 US$0.7295 +0.28per cent -4.90per cent +US$0.7341 +US$0.7288
1.0807 1.0817 -0.09per cent +0.00per cent +1.0832 +1.0783
0.8583 0.8572 +0.13per cent -3.96per cent +0.8599 +0.8567
Dollar/Dollar US$0.7052 US$0.6999 +0.76per cent -1.80per cent +US$0.7068 +US$0.6997
8.6890 8.6700 +0.25per cent +1.22per cent +8.7100 +8.6290
10.2625 10.2330 +0.29per cent -1.95per cent +10.2853 +10.2060
8.6247 8.6251 +0.13per cent +5.23per cent +8.6433 +8.5804
10.1852 10.1721 +0.13per cent +1.08per cent +10.2000 +10.1580
(Reporting by Chuck Mikolajczak; Editing by Alexander Smith)