Investing.com - The dollar slid lower against a basket of other major currencies on Tuesday, as U.S. Treasury yields fell for a second day, weighing on the greenback.
The yield on U.S. 10-Year Treasury notes fell to a one-week low of 2.58% on Tuesday, amid concerns that recent data showing that the labor market is continuing to strengthen will not be enough to prompt the Federal Reserve to bring forward its timetable for raising interest rates.
The greenback was boosted after data late last week showed that the U.S. economy added a larger-than-forecast 288,000 jobs last month, while the unemployment rate ticked down to 6.1%, the lowest in almost six years.
But the dollar’s gains against the other major currencies paused on Tuesday due to the belief that the Fed will stick to its dovish stance on monetary policy amid concerns over ongoing slow growth in inflation and wages.
Markets were looking to Wednesday’s minutes of the Fed’s June meeting for further indications on its monetary policy stance.
EUR/USD edged up 0.08% to 1.3612, off lows of 1.3588.
The euro’s gain were held in check after German trade data earlier in the day showed that both imports and exports fell in May, adding to concerns over the outlook for the broader euro zone economy.
The dollar fell to session lows against the Japanese currency, with USD/JPY down 0.31% to 101.54, while USD/CHF slid 0.11% to 0.8925.
GBP/USD was at 1.7115 after falling to lows of 1.7086 earlier when data showed that manufacturing production in the U.K. declined at the fastest rate in 16 months in May.
The data dampened optimism over the outlook for the U.K. economic recovery, but was unlikely to alter expectations that the Bank of England could raise interest rates before then end of this year.
Elsewhere, the New Zealand dollar rose to its highest in three years on Tuesday, with NZD/USD hitting peaks of 0.8806 after ratings agency Fitch raised the country’s credit outlook to positive from stable.
Meanwhile, AUD/USD was up 0.30% to 0.9400, while USD/CAD eased 0.15% to 1.0668.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, dipped 0.07% to 80.22.