The U.S. dollar stayed weak for much of the day’s session on Tuesday, with traders looking ahead to the Federal Reserve’s monetary policy announcement for some direction.
The Fed is widely expected to announce a 25-basis points rate hike.
Data released by the Labor Department showed producer prices increased by slightly less than expected in the month of February. The data said the producer price index for final demand climbed by 0.8% in February after surging by an upwardly revised 1.2% in January.
Economists had expected producer prices to advance by 0.9% compared to the 1% jump originally reported for the previous month. Excluding prices for food, energy and trade services, core producer prices edged up by 0.2% in February following a 0.8% increase in January.
New York manufacturing activity unexpectedly contracted in the month of March, according to a report released by the Federal Reserve Bank of New York.
The New York Fed said its general business conditions index tumbled to a negative 11.8 in March from a positive 3.1 in February, with a negative reading indicating a contraction in regional manufacturing activity. Economists had expected the index to dip to a positive 7.0.
With the much bigger than expected decrease, the general business conditions index dropped to its lowest level since May 2020.
The dollar index, which dropped to 98.64 in the Asian session, climbed to 99.20 later on in the day before retreating to 99.05, up marginally from the previous close.
Against the Euro, the dollar is trading at $1.0944, after having weakned to $1.1021 in the Asian session.
The dollar is trading at $1.3041 against Pound Sterling, weakening from $1.3001.
The dollar is trading at 118.31 yen, about 0.1% more than the previous close of 118.19 yen.
Against the Aussie, the dollar is at $0.7195, down marginally from $0.7187.
The Swiss franc is trading at 0.9413 a dollar, easing from 0.9386. The Loonie is firmer against the dollar, at C$ 1.2772, gaining from C$ 1.2826.