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Dollar mixed ahead of European inflation data

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Shutterstock photo - The U.S. dollar was mixed against its major rivals in Tuesday's Asian session ahead of the release of data on European inflation.

In Asian trading Tuesday, the EUR/USD was off 0.05% to 1.3376. The pair was likely to find support at 1.3254, Friday's low, and resistance at 1.3398, Monday's high.

Later on Tuesday, investors will get a look at rate of inflation in several European countries, which could weigh on the EUR/USD. Higher than expected rates of inflation might suggest that the European Central Bank will have to curtail economic stimulus measures.

Investors will also see data on inflation in the U.K., which is likely to weigh on the GBP/USD.

That pair traded at 1.6091, up 0.08% on the session. The GBP/USD is likely to find support at 1.6012, Thursday's low, and resistance at 1.6160, Thursday's high.

Economists are expecting the U.K.'s consumer price index to increase 0.5% when its reported later on Tuesday. Greater than expected inflation could put constraints on the Bank's new Governor, Mark Carney, limiting his ability to support the broader U.K. economy.

In Asia, the Japanese yen strengthened against the dollar, with the USD/JPY falling to 0.55% to 88.98. This move comes in contrast to the recent trend in the currency pair, which had seen the yen weakened significantly against the U.S. dollar on a steady basis since early December.

The dollar strengthened against both the Australian and New Zealand dollars. The AUD/USD pair traded down 0.11% to 1.0553, while the NZD/USD dropped 0.27% to 0.8407.

The New Zealand food price index indicated that food prices dropped 0.2%. There was no consensus estimate, for the measure, but the drop continued a trend of declining food prices; the last reading indicated that food prices had declined 0.8%.

Cheaper food in New Zealand would tend to indicate lower levels of inflation on the island nation.

Overall, the dollar index was little changed on the session, rallying 0.01% to 79.50 - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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