The dollar is under pressure as key U.S. data looms
The dollar is under pressure against major currencies on Tuesday as the market looks ahead to U.S. durable goods and other data this week that may determine the timing of further interest rate hikes.
The dollar index, which measures the greenback against a basket of six major currencies, was down 0.2% at 102.20 as of 10:45 a.m. ET. The euro was up 0.2% at $1.0935, while the Japanese yen was up 0.1% at 135.25 per dollar.
The dollar index has been under pressure in recent weeks as investors have grown more skeptical about the pace of U.S. interest rate hikes. The Federal Reserve is widely expected to raise interest rates by 50 basis points at its meeting next week, but some investors are now betting that the central bank may pause its tightening cycle later this year.
The upcoming U.S. data could provide some clues about the direction of the dollar. Durable goods orders for May are due out on Wednesday, and economists expect them to rise by 0.5%. If the data comes in stronger than expected, it could boost the dollar.
FX traders are also watching for any signs that the Japanese government may intervene in the currency market to prevent the yen from falling further. The yen has been under pressure in recent weeks as the Bank of Japan has kept interest rates low, while the Federal Reserve has been raising rates.
The gap between U.S. and Japanese monetary policy has helped to fuel the dollar’s rise against the yen. If the Japanese government does intervene, it could provide some relief to the yen and put downward pressure on the dollar.
Overall, the dollar is likely to remain under pressure in the near term as investors await more clarity on the pace of U.S. interest rate hikes. However, the upcoming U.S. data and any intervention by the Japanese government could provide some support for the dollar.