The dollar steadied and regained some lost ground on Tuesday, as markets walked back some of their more-dovish expectations for U.S. interest rates.
Traders had begun to price in expectations that the U.S. Federal Reserve would pause its interest rate hikes after comments from Fed chief Jerome Powell on Friday that the central bank would be patient as it evaluated potential risks of an economic slowdown.
That message had driven Wall Street optimism and pushed stock indexes higher as it appeared to signal the central bank would tighten policy more slowly than previously expected; because higher interest rates make holding U.S. dollars more attractive, concerns rates wouldn’t rise as much had spurred declines.
But with trading volumes picking up as market participants return from the long holiday period, the greenback is retracing some of its losses.
The U.S. dollar index was at 95.90 at 7:05 A.M. SGT, off levels as high as 96.01 in Tuesday’s session and as high as 96.61 on Friday, but also off levels as low as 95.66 on Monday, according to ICE futures data.
The 10-year U.S. Treasury note yield was at 2.732 percent at 8:23 A.M. SGT rising from as low as 2.633 percent in Monday’s session, according to Tullett Prebon data.
The euro/dollar was at 1.1458 at 8:28 A.M. SGT after trading in a 1.1438 to 1.1462 range on Tuesday, according to DZHI data.
The British pound/dollar was at 1.2737 at 8:28 A.M. SGT after trading in a 1.2705 to 1.2797 range on Tuesday, according to DZHI data.
The dollar/yen was at 108.782 at 8:29 A.M. SGT after trading in a 108.42 to 109.088 range on Tuesday, according to DZHI data.
The dollar/yuan was at 6.8518 at Tuesday’s close after trading in a 6.8424 to 6.8609 range during the session, according to DZHI data.
The dollar/Singapore dollar was at 1.3570 at 8:29 A.M. SGT after trading in a 1.3549 to 1.3594 range on Tuesday, according to DZHI data.
The dollar/Malaysian ringgit was at 4.1090 at 8:17 A.M. SGT after trading in a 4.1040 to 4.1180 range on Tuesday, according to DZHI data.
The dollar/Indonesian rupiah was at 14,140 at Tuesday’s close after trading in a 13,990 to 14,157 range during the session, according to DZHI data.