Dollar Inches Higher Despite Softer Industrial Production
The U.S. dollar inched higher against its rivals on Tuesday, even as weaker-than-expected U.S. industrial production data added to expectations the Federal Reserves is likely to stay on pause for prolonged period.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.12% to 96.67.
Industrial production -- a measure of output at factories, mines and utilities -- fell 0.2% in March from the prior month. That confounded economists’ expectations for a 0.2% rise.
"The data have been volatile in recent months, led by swings in autos, but the net result has been weakening; manufacturing is especially export-oriented," High Frequency Economics said in a note.
The data arrived as the Boston Fed's Eric Rosengren talked up the prospect of keeping rates lower for longer, saying the central bank does not need to adjust monetary policy at the moment. Rosengren's dovish remarks come a day after Chicago Fed President Charles Evans said rates can stay unchanged until the fall of 2020.
GBP/USD fell 0.32% to 1.3049 on Brexit uncertainty despite Labour leader Jeremy Corbyn denying a report that Brexit talks with Prime Minister Theresa May’s government had stalled.
EUR/USD fell 0.19% to $1.1286 as better-than-expected euro zone economic sentiment data was offset by reports European Central Bank members are uncertain over whether the trading bloc will mount an economic recovery in the second half of the year.
USD/CAD fell 0.04% to C$1.3357 as oil prices bounced from session lows to support the loonie. The loonie, however, could be set to come under pressure amid expectations that the Bank of Canada may cut rates. The first quarter "was very weak," said David Rosenberg, chief economist at Gluskin Sheff in Toronto. So weak, in fact, that Rosenberg believes the odds of a BOC rate cut should be much higher than they are now.
USD/JPY fell 0.04%% to Y111.99