The U.S. dollar, on Tuesday, February 28, was slightly weaker against major rivals, with investors mostly sitting on the sidelines.
The greenback USDJPY, -0.85% fell to ¥112.08, compared with ¥112.70 late Monday in New York. The euro EURUSD, +0.3684% was trading at $1.0598, slightly up from $1.0587 late Monday.
The WSJ Dollar Index BUXX, -0.31% a measure of the U.S. dollar against a basket of major currencies, was down 0.10% at 90.89. The ICE U.S. Dollar index was off by less than 0.1% at 101.05.
The greenback was struggling to hold on to overnight gains triggered by renewed expectation for a Federal Reserve interest-rate increase next month. Federal Reserve Bank of Dallas President Robert Kaplan, who votes on interest rate decisions this year, said he feels it is better to raise those rates “sooner rather than later.”
Some analysts suggested that the hope in the market is for the policy signals that would allow the dollar to break out of its recent narrow trading range. But there is also a risk of a decisive drop lower, if Trump fails to offer policy specifics.
“At the same time, given the build-up, the mercurial temperament, and unorthodox style of this administration, it could set up investors for disappointment,” said analysts at Brown Brothers Harriman in emailed notes.
The reaction to data on the gross domestic gross and consumer-price inflation, was largely muted. The first revision for the fourth-quarter GDP showed the economy grew at 1.9% annualized pace, driven by consumer spending, but the Fed’s preferred gauge for inflation—PCE was trimmed to 1.9% from 2.2%.
But the U.S. currency lacked clear direction, as investors were largely taking a wait-and-see stance ahead of Trump’s prime-time speech
Nomura Securities chief FX strategist Yunosuke Ikeda said it would be reasonable to assume a lack of direct economic and fiscal implications from Trump’s speech.
In other currency trade, the euro EURJPY, -0.49% fell to ¥118.77 from ¥119.32 late Monday.
