The dollar fell on Tuesday, extending the decline after disappointing reading of US consumer trust and decreased in the results of US yields, while optimism for more expenses in Germany helped lift the euro.
Greenback extended the decline after the conference council said the consumer confidence index fell 7 points, the biggest decline since August 2021, to 98.3, far from the estimated 102.5 economists surveyed by Reuters.
This is a line chart that shows the consumer confidence index for the past 20 years. In February, the overall index was 98.3, the current economic view was 136.5 and the hope for the future was 72.9.
This is a line chart that shows the consumer confidence index for the past 20 years. In February, the overall index was 98.3, the current economic view was 136.5 and the hope for the future was 72.9.
“The current situation index improves, but consumers expect the dark sky in front. Change can be scary, so it is not surprising that self -confidence is falling, “said Brian Jacobsen, head of economist at Annex Wealth Management in Menomonee Falls, Wisconsin.
The dollar index, which measured the greenback against a basket of currency, fell 0.51% to 106.20, not far from the lowest two months from 106.12 hit on Monday, with euros rose 0.46% at $ 1,0514.
Concerns have begun to emerge about US economic growth, and concerns about inflation grew as a deadline for tariffs by Trump in Canada and Mexico to be determined for next week. Investors are also afraid of the impact of the labor market from actions taken by the Government’s Efficiency Department Elon Musk.
“There will be a lot of alternating in Trump’s initiative, and of course the market in the long run in general, does not like tariffs,” said Joseph Trevisani, senior analyst at FXStreet in New York.
“There must be nervousness out there because some of these things can run in the wrong way, of course inflation has not shown signs of further retreat.”
Reflecting concerns, the results on the benchmark of the 10-year US record down 10.6 basis points to 4.287% after reaching the lowest level 2-1/2 months at 4.283%.
After the early signs of Germany might be able to move quickly, the winner of the Friedrich Merz selection on Tuesday put aside the rapid reform to the German state loan limit known as the “debt brake” and said it was too early to say whether the parliament that came out could wave through a push of expenditure large -scale military.
Development in Germany also encouraged the Head of FX Research Deutsche Bank, George Saravelos, to revise on Tuesday his bearish view of euro against dollars to neutral. He was previously bearish, regardless of a general meeting at Treasury, because “the results of the German election are not conducive to the fasting of German fiscal attitude”.
“We see the balance of the risk distributed evenly over the next few months,” he added.
Higher steps with dollars on Monday night against Mexican Peso and Canadian dollars after US President Donald Trump said the tariffs in Mexico and Canada will continue as a schedule and come into force next week not to be dragged on Tuesday, showing that investors still see the threat As a negotiation tool by Trump.
US Secretary of the Treasury Scott Besent on Tuesday that the US economy is more fragile below the surface than what is suggested by economic metrics, citing interest rate volatility, sticky inflation and work growth that focuses on the government sector, while also saying that tariffs are important sources of income.
Mexico peso strengthened 0.32% versus dollar at 20.414 although the Canadian dollar weakened 0.2% versus greenback to C $ 1.43.
Analysts at Goldman Sachs noted, “The risk is still that we see the repetition of Brinkmanship Trump from last month, with the price of waved prices in the currency we are approaching March 4.”
Against Japanese yen, the dollar weakened 0.75% to 148.59 while Sterling strengthened 0.36% to $ 1,2669.
British Prime Minister Keir Starmer said he would increase the annual defense expenditure to 2.5% from GDP in 2027 and target the 3% level, which was finally seen after the Cold War, a signal for Trump that Britain could help increase European security.
In Cryptocurrency, Bitcoin plummeted 8.13% to $ 86,340.15 as a tariff and growth of fears of a dent risk.
Source: Reuters (reporting by Chuck Mikolajczak; Editing by David Evans)
