Dollar drops on Tuesday

Shafaq News / The dollar paused its rally on Tuesday, as traders reaffirmed their bets for a slew of Federal Reserve rate cuts this year on the belief that inflation in the U.S. is slowing sufficiently.

In cryptocurrencies, bitcoin hovered near its strongest level since April 2022 on growing anticipation of imminent approvals of spot bitcoin exchange-traded funds (ETF).

The euro last stood at $1.0950, away from its recent three-week low of $1.0877, while the Japanese yen distanced itself from the 145 per dollar level following a broad decline in the greenback as U.S. Treasury yields slipped.

moves were partly driven by the New York Fed's latest Survey of Consumer Expectations which showed that U.S. consumers' projection of inflation over the short run fell to the lowest level in nearly three years in December.

A reading on U.S. inflation is due later in the week, which will likely provide further clarity on how much room the Fed has to ease rates this year.

"The big story last night, the catalyst, was the data regarding inflation expectations going forward," said Kyle Rodda, a senior financial market analyst at Capital.com.

"While it's still a tight labour market, we're still seeing those sort of disinflationary impulses in the United States, which again raises the probability that the Fed will have capacity to cut rates fairly soon."

(Reuters)