Dollar Index is trading down 0.09% at 103.54
The U.S. dollar stabilized in early European trade Tuesday after earlier falling back from a two-decade high as traders reappraise the likelihood of aggressive Federal Reserve rate increases.
At 3:05 AM ET (0705 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, inched higher to 103.725, having risen as high as 104.19 overnight, a fresh 20-year peak.
Weighing on the dollar were comments from Atlanta Federal Reserve President Raphael Bostic on Monday, who played down talk of the U.S. central bank lifting interest rates by more than half a percentage point at its next meeting in June.
“I would say that (a 75-basis-point rate hike) is a low probability outcome given what I expect will happen in the economy over the next three to four months,” Bostic told Reuters in an interview.
The U.S. Federal Reserve announced a 50 basis point hike last week, its largest increase since 2000, and expectations have been growing that the central bank will hike even more aggressively to combat inflation running at levels not seen for 40 years.
U.S. Treasury yields have climbed steadily on expectations the Fed will push interest rates substantially higher, but Bostic’s comments resulted in the yield on benchmark 10-year U.S. government notes falling back Tuesday, although it still remains over 3%.
On technical fronts DOLLAR INDEX RSI stood at 69.16 and currently it is trading above all MA. So, BUY position can be taken with following target and stoploss: