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Dollar steady to lower vs. rivals, eyes on ECB meeting

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Shutterstock photo - - The dollar was steady to lower against the other major currencies on Tuesday, after mixed economic reports from the euro zone, while caution ahead of the European Central Bank's policy meeting continued to support safe-haven demand.

The dollar was steady changed against the euro, with EUR/USD up 0.05% to 1.3603.

Eurostat said consumer price inflation in the euro zone increased by 0.5% last month, down from 0.7% in April and missing expectations for a reading of 0.7%. The rate stands well below the ECB's target of near but just under 2%.

A separate report showed that the unemployment rate in the single currency bloc ticked down to 11.7% in April, from 11.8% the previous month, confounding expectations for the rate to remain unchanged.

Earlier Tuesday, official data showed that the number of unemployed people in Spain dropped by 111,900 last month, compared to expectations for a 112,300 decline, after a 111,600 fall in April.

But sentiment on the single currency remained vulnerable after data on Friday showing that the annual rate of inflation in Italy and Spain slowed in May added to expectations that the ECB will take steps to tackle low consumer price growth.

The pound edged higher against the dollar, with GBP/USD adding 0.13% to 1.6768.

Sterling's gains were capped however after Markit research group said the U.K. construction PMI ticked down to 60.0 in May, from a reading of 60.8 the previous month. Analysts had expected the index to remain unchanged last month.

The dollar was steady against the yen and the Swiss franc, with USD/JPY inching 0.03% higher to 102.42 and with USD/CHF dipping 0.04% to 0.8984.

The greenback was steady to lower against the Australian, New Zealand and Canadian dollars, with AUD/USD gaining 0.31% to 0.9276, NZD/USD edging 0.11% higher to 0.8465 and USD/CAD easing up 0.05% to 1.0905.

Earlier in the day, official data showed that retail sales in Australia rose 0.2% in April, disappointing expectations for a 0.3% gain, after a 0.1% uptick the previous month.

Separately, the Bank of Australia left its benchmark interest rate at 2.5% in a widely expected move and said that "on present indications, the most prudent course is likely to be a period of stability in interest rates."

The export-related currencies also found some support after data released earlier showed that China's final HSBC Purchasing Managers Index came in at 49.4, down from a preliminary reading of 49.7, but higher then April's reading of 48.1.

A separate report showed that activity in the country's services sector rose to a six-month high in May.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.05% to 80.65.

Later in the day, the U.S. was to produce data on factory orders. offers an extensive set of professional tools for the financial markets.

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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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