Forex - Dollar gains on ECB comments, soft U.K. output data

Shutterstock photo - The dollar rose against most major currencies on Tuesday after a key European Central Bank council member hinted that policy loosening may be possible in the eurozone, while soft U.K. output data fueled demand for the greenback on talk of easing across the English Channel as well.

In U.S. trading on Tuesday, EUR/USD was down 0.14% at 1.3028.

European Central Bank council member Jens Weidmann said earlier that inflationary pressures were waning across Europe, which market participants interpreted as a sign the monetary authority may consider trimming interest rates and even mull buying sovereign debt if requested by member nations to spur recovery, which would weaken the euro.

The greenback, meanwhile, was up against the pound, with GBP/USD trading down 0.05% at 1.4907.

The U.K. Office for National Statistics reported earlier that manufacturing production dropped 1.5% in January, missing market expectations for a 0.1% increase.

Industrial output, meanwhile, fell short of forecasts for a 0.1% increase and contracted by 1.2% in January.

The data stoked already growing concerns of a triple-dip recession and an increasing risk of Bank of England easing.

Meanwhile, a separate report revealed that the U.K.'s trade deficit narrowed to GBP8.19 billion in January, from GBP8.73 billion the previous month.

Economists had expected the deficit to widen to GBP9.0 billion.

The dollar, meanwhile, continued to see lingering demand against most other currencies stemming from last week's surprisingly strong jobs data in the U.S.

The Bureau of Labor Statistics reported on Friday that the U.S. economy added 236,000 nonfarm payrolls in February, way more than an expected 160,000 increase and up above 119,000 reported in January.

The headline unemployment rate fell to 7.7% in February from 7.9% in January, beating analysts' calls for the rate to remain unchanged.

The numbers fueled growing sentiments that the Federal Reserve will soon consider wrapping up stimulus programs.

Elsewhere, the dollar softened against the yen, with USD/JPY trading down 0.27% at 96.03, and flat against the Swiss franc, with USD/CHF trading down 0.02% at 0.9471.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.02% at 1.0260, AUD/USD up 0.37% at 1.0318 and NZD/USD trading down 0.34% at 0.8253.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.04% at 82.84.

On Wednesday, the U.S. is to release government data on retail sales, as well as official data on import prices, business inventories and crude oil stockpiles. - 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.

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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