The dollar was contrary to the Euro on Tuesday when the German Parliament approved a plan for a large surge in spending on Tuesday and when the Federal Reserve began the March policy meeting that could offer instructions to the US interest rate.
Euro 0.2% lower at $ 1,0915, after reaching $ 1,0954 previously in the session, the highest since October 10.
“(This) Classic ‘Buy Rumors, Selling Facts’ Really Reaction, which is not too surprising,” said Michael Brown, a senior research strategy expert at Pepperstone.
“Buck has been beating higher in this new trading, against most colleagues, who helped move to the negative side a little,” he said.
The German Parliament Approval of the plan for a large surge in spending -a massive dispensing for decades of fiscal conservatism in the hope of reviving economic growth and increasing military expenditure for a new era of Europe’s collective defense.
Euro rose earlier in the session after the data showed the morals of German investors increased more than expected in March.
In general, the currency market movement is largely muted as a potential catalyst, including German voting, the development of the possibility of Russian-Ukraine peace agreements and policy announcements from large central banks in the coming days, making traders careful.
While analysts estimate Fed to hold the attitude of their monetary policy in the midst of continuous inflation problems, investors will find new economic projections from FED officials for evidence of how the US central bankers view the impact of Trump’s administrative policy.
“SP (Summary of Economic Projection) will be the most interesting aspect, I imagine, with short -term inflation expectations that are likely to push higher, and growth projections are marked by touch, although the belief behind the estimate will be lacking, in the middle of a macro view that is always changing,” Brown said.
Greenback reached the highest two weeks against Yen because the investor was waiting for the results of the policy meeting on Wednesday from the Bank of Japan. The last dollar rose 0.3% in 149.65 yen. Germany seems to be choosing a wave of historic expenditure.
BOJ’s policy makers are expected to discuss how much increased risk caused by the US trade war for Japan’s economy.
“We will expect this adjustment in determining the terminal level price to be maintained after the Boj meeting,” said Lee Hardman, a senior currency analyst at MUFG, referring to market expectations that rose from around 0.90% at the end of 2024 to almost 1.20%.
The market will also watch the development of the possibility of a Russian-Ukraine peace agreement, which will be positive for a single currency. Kremlin said on Tuesday that President Vladimir Putin and President Donald Trump would call between 1300 and 1500 GMT.
Elsewhere, the Australian dollar dropped 0.5% to $ 0.6352 after rising to the highest in about one month on Monday.
Bitcoin, the largest cryptocurrency in the world based on market capitalization, has dropped 2.5% to $ 81,878.
Source: Reuters (Reporting by Saqib Iqbal Ahmed; Additional Reporting by Stefano Rebaudo; Editing by Bernadette Baum)
