The DXY, greenback’s index against six major currencies was 0.3% higher at 89.346, continuing its Monday’s rebound from a three-year low of 88.251 set on Friday. On the other hand, Dollar’s outlook is clouded by concerns that the ballooning U.S. fiscal deficit could disrupt the economy.
The Dollar added 0.15% against the JPY to 106.760 and 0.15% against the Euro to $1.2387. With little in the way of significant economic data on the schedule, traders expect the $151 billion sales of short-term U.S. Treasury sales will provide the clearest gauge yet of how steeply bond yields may rise in the world’s largest economy.
Traders will also be analyzing the minutes from the January’s 30-31 Federal Reserve’s meeting, Janet Yellen’s last as chair, where the rate was kept unchanged. The Fed minutes could pave the way for the future steps and thoughts of the policymakers where they will be released on Wednesday at 19:00 GMT.
The U.S. currency has been weighed down by a barrage of factors, including worries about widening U.S. trade and budget deficits and speculation Washington might pursue a weak dollar strategy. There is also talk that foreign central banks may be reallocating their reserves out of the dollar.
Economists say U.S. President Donald Trump’s tax cuts and spending plans could backfire by overheating an already strong economy and causing an unwelcome pick-up in inflation.