The US dollar remained stable as the market entered the European session by moving higher against the yen following a strengthening in 10 -year US bond yields.
Against a basket of major currencies, the dollar index that measures the strength of the greenback dollar traded positive at around 101.95.
The king of the currency had slipped to a one-month low on Monday as U.S. inflation and other economic indicators showed signs of peaking amid the Federal Reserve’s (Fed) aggressive policy tightening.
However, those expectations were again shaky after the European Zone recorded higher price increases in May, indicating that inflationary pressures were still hovering in the economy.
This prompted the U.S. dollar to regain strength in hopes the Fed will continue to raise interest rates this year, especially after Chairman Jerome Powell got the leeway from President Joe Biden to tackle inflation.
Although the USD recorded an increase, most other major currencies still traded stable and limited the decline from declining further.
The euro struggled to defend its position at 1.0700 while the pound persisted by trading below the 1.2600 price level against the US dollar.
The Aussie dollar was positive after being shown with Australian economic growth data in the first quarter that exceeded market expectations despite a slower reading than before.
The Canadian dollar strengthened ahead of the Central Bank of Canada (BOC) policy meeting which is expected to raise interest rates again, as well as supported by high crude oil trading.
In addition, investors will also be exposed to the publication of the US manufacturing PMI of the ISM survey in the New York session which is forecast to be slower in May.
