- Traders await more clues on rate cuts from Fed officials
- Euro hovers around $1.14, hits new 3-month high
- Yen rises above 107 vs dollar, highest since January
- Further dollar softness seen hinging on G20 summit outcome
- Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Updates market action, changes dateline, previous LONDON)
The dollar slipped against most major currencies on Tuesday, hitting a three-month low versus the euro, as expectations of multiple decreases of U.S. interest rates by the Federal Reserve have spurred selling of the U.S. currency.
Growing tensions between Iran and the United States stoked fresh safe-haven buying of yen, which reached its strongest levels against the greenback since early January.
Traders await fresh clues on the Fed's stance on possible rate cuts, starting as soon as next month. A number of Fed officials were scheduled to speak on Tuesday with Fed Chairman Jerome Powell due at 1 p.m. (1700 GMT).
Last week's signal from the U.S. central bank that it was ready to lower borrowing costs to counter slowing domestic growth and sluggish inflation caused traders to exit their earlier bullish positions on the dollar, analysts said.
Interest rates futures implied traders fully priced in a quarter-point rate cut from the Fed next month and saw high rising probability of at least two more cuts after July.
Falling U.S. bond yields and bearish technical indicators have stoked the view the greenback would have more room to fall in the coming months, analysts said.
"This has more legs to go," said Paresh Upadhyaya, director of currency strategy at Amundi Pioneer Investments in Boston.
At 10:55 a.m. (1455 GMT), the dollar JPY=EBS was down 0.34% at 106.94 yen after hitting 106.78 yen during Asian trading, which was its weakest since Jan. 3.
Demand for the yen was underpinned by new U.S. sanctions against Iran's supreme leader and foreign minister. Iran said on Tuesday the move had closed off diplomacy between the two countries.
The greenback was 0.13% lower versus the pound GBP=D3 . It was modestly weaker against the Canadian, Australian and New Zealand dollars. CAD=D4 AUD=D4 NZD=D4
On the other hand, the euro was down 0.12% at $1.1384. The single currency retreated from $1.1412 earlier Tuesday, which was its highest since March 21.
The dollar index moved further away from its 200-day moving average at 95.995.
Investors are monitoring whether U.S. President Donald Trump and Chinese President Xi Jinping will at least call a truce in their trade war when they meet at a summit of the G20 major economies in Osaka, Japan, later this week.
"The next risk event is the G20 summit. It will give us a sense just how far things are between U.S. and China on trade," Upadhyaya said.
Trump considers his meeting with Xi an opportunity to "maintain his engagement" and see where China is on their trade dispute, a senior U.S. official said on Monday.
======================================================== Currency bid prices at 10:53AM (1453 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1392 $1.1396 -0.04% -0.67% +1.1412 +1.1377 Dollar/Yen JPY= 106.9100 107.2800 -0.34% -3.04% +107.4000 +106.7900 Euro/Yen EURJPY= 121.79 122.28 -0.40% -3.51% +122.4600 +121.6600 Dollar/Swiss CHF= 0.9719 0.9718 +0.01% -0.97% +0.9774 +0.9695 Sterling/Dollar GBP= 1.2728 1.2739 -0.09% -0.23% +1.2783 +1.2711 Dollar/Canadian CAD= 1.3168 1.3177 -0.07% -3.41% +1.3196 +1.3152 Australian/Doll AUD= 0.6971 0.6961 +0.14% -1.11% +0.6974 +0.6954 arEuro/Swiss EURCHF= 1.1075 1.1076 -0.01% -1.59% +1.1124 +1.1062 Euro/Sterling EURGBP= 0.8947 0.8944 +0.03% -0.41% +0.8963 +0.8917 NZ NZD= 0.6651 0.6617 +0.51% -0.98% +0.6653 +0.6618 Dollar/DollarDollar/Norway NOK= 8.5126 8.4789 +0.40% -1.46% +8.5205 +8.4769 Euro/Norway EURNOK= 9.6974 9.6678 +0.31% -2.11% +9.7023 +9.6644 Dollar/Sweden SEK= 9.2563 9.2778 -0.29% +3.26% +9.2932 +9.2421 Euro/Sweden EURSEK= 10.5449 10.5760 -0.29% +2.74% +10.5906 +10.5180 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GRAPHIC-Trade tensions boost U.S. rate-cut expectations http//tmsnrt.rs/2KdE2byGRAHIC-Trade tensions boost U.S. rate-cut expectations interactive http//tmsnrt.rs/2KdDNxa GRAPHIC-Dollar vs euro, Japanese yen http//tmsnrt.rs/2Ft9GPi
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
