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Dollar Loses Ground Against Peers

The U.S. dollar exhibited weakness on Tuesday as the Euro, Sterling and the Aussie gained in strength amid increased risk appetite after data showed a drop in new coronavirus infections in several hot spots across Europe.

The dollar index dropped to a low of 99.77 before regaining some lost ground. Still, it was down more than 0.75%, at 99.91 around late afternoon.

Against the Euro, the dollar weakened to as low as $1.0927 before recovering to $1.0897, down nearly 1% from Monday’s close.

Against Pound Sterling, the dollar eased to $1.2337, giving up about 0.85%.

The Japanese Yen gained as well against the dollar, rising to 108.82 a dollar, compared to 109.22 yen a dollar on Monday.

The dollar dropped to 1.3990 against the loonie, losing about 0.85%. Against Swiss franc, it was down almost 1% at 0.9693.

The Aussie was up sharply against the dollar with the pair trading at 0.6177. Australia’s central bank maintained its interest rate and the target yield on three-year government bonds as it expects the economy to register a “very large” contraction in the second quarter due to the disruption caused by the coronavirus.

At the monetary policy meeting on Tuesday, the Reserve Bank of Australia board kept its interest rate at a record low 0.25% and the targeted yield on three-year government bonds at around 0.25%. The bank reduced the interest rate twice in March, by 25 basis points each.

In economic news from the U.S., consumer credit jumped much more than expected in the month of February, according to a report released by the Federal Reserve on Tuesday.

The Fed said consumer credit surged up by $22.3 billion in February after climbing by $12.1 billion in January. Economist had expected consumer credit to increase by $14.0 billion.

The bigger than expected increase came as non-revolving credit, such as student loans and car loans, jumped by $18.1 billion in February after increasing by $14.5 billion in January.

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