The positive movement of the US dollar in the previous session unfortunately failed to hold when the king of the currency fell back lower as the market stepped into the European session.
At the time of writing, the dollar index is trading 0.3% lower against most major currencies at around 101.75.
The latest statement from European Central Bank (ECB) President Christine Lagarde on Tuesday, continues to give hope to investors that it will start raising interest rates soon.
Like his previous statement, he told Bloomberg TV that ECB rates are likely to return positive by the end of the third quarter. Still, Lagarde said the market should not translate his statement into expectations of how many basis points the rate will raise.
The euro posted higher gains following the comments even as published European Zone manufacturing and services PMI data showed slower growth in May.
The pound, meanwhile, failed to maintain its strength after there were doubts about further interest rate hikes by the Bank of England (BOE).
This follows data published recently which showed the UK economy almost came to a halt in May as rising inflationary pressures had a significant impact on demand.
On the other hand, the Aussie and New Zealand dollars welcomed the U.S. statement that the Joe Biden administration was considering cutting Chinese import tariffs imposed during the era of the Donald Trump administration.
Meanwhile, news of Shanghai’s reopening from the closure of Covid-19 continues to support market sentiment that hopes a recovery in China will help global growth.
