Dollar edges up as traders await rate cut clues, euro stabilizes

Shafaq News/ The dollar edged higher on Tuesday as traders awaited a U.S. retail sales report and comments from Federal Reserve officials to help gauge the timing of interest rate cuts, while the euro steadied after last week's politics-driven tumble.

The U.S. dollar index , which measures the currency against six major peers, was last up 0.18% to 105.46. It lost 0.2% on Monday as it retreated from Friday's six-week high of 105.80.

The greenback has been pulled in different directions as mild U.S. inflation readings contrasted with an overall hawkish stance by Fed officials at last week's policy meeting, when they trimmed their previous median projection for three quarter-point rate cuts this year to one.

Last week's 0.6% rally in the dollar was mostly driven by a sharp euro selloff after French President Emmanuel Macron called a shock snap election in response to his ruling centrist party's trouncing by Marine Le Pen's eurosceptic National Rally in the European Parliament elections.

The euro has stabilised this week and was last 0.1% lower at $1.0724, up from a six-week low of $1.0668 on Friday after climbing 0.26% on Monday.

"Over the weekend, France's Le Pen said that she would be ready to work with President Macron and would not seek him out," said Mohit Kumar, chief economist for Europe at Jefferies.

"A portion of the recent risk off moves have been driven by fears of 'Frexit' and euro area breakup," he said. "Those fears are overblown."

U.S. retail sales data is due at 1230 GMT (8.30 a.m. ET) and is expected to show a 0.3% month-on-month pick-up in May after zero growth in April.

Philadelphia Fed President Patrick Harker revealed on Monday that he is in the single-cut camp, but left the door open to changing his view depending on incoming data.

A long list of Fed officials take to the podium at various venues later in the day, including the Boston Fed's Susan Collins and the Richmond Fed's Thomas Barkin.

(Reuters)