The US dollar gained strength against several major currencies on Tuesday, except for the euro, as investors prepared for key economic data releases.
Earlier in the day, the British pound (GBP) briefly crossed the $1.30 mark, its highest level in over four months. This increase was fueled by expectations that the Bank of England (BoE) will keep interest rates at 4.5% this week, with traders predicting that rate cuts will happen more slowly compared to the US Federal Reserve.
On the other hand, the euro strengthened against the dollar as investors focused on a crucial vote in Germany’s parliament regarding increased government spending on infrastructure and defense. Analysts suggest that higher spending could boost economic growth in the Eurozone, supporting the euro’s value.
Other currency movements included:
- GBP/USD: The British pound slipped slightly to 1.2988 from 1.2992 at Monday’s close.
- USD/JPY: The US dollar rose against the Japanese yen to 149.60 from 149.17, following a decline in Japan’s service sector activity.
- USD/CAD: The US dollar also strengthened against the Canadian dollar to 1.4288 from 1.4283, ahead of the release of Canada’s inflation data.
The next key events for currency markets include the Bank of England’s policy meeting on Thursday and the European Central Bank’s meeting scheduled for April 16-17.
