Investing.com - The dollar extended losses against the other major currencies on Tuesday, pressured lower by the Federal Reserve’s dovish guidance on the future pace of monetary tightening.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.6% at 99.56 at 12.00 ET, its lowest trough since February 3.
Chicago Fed President Charles Evans said Monday the Fed is on track to raise rates twice more this year, underlining the view that the central bank will stick to a gradual pace of tightening after last week’s rate hike.
The dollar was also on the defensive after G20 financial leaders dropped a pledge to keep global trade free and open from a policy statement at the weekend, following opposition from the increasingly protectionist Trump administration.
The move renewed uncertainty over U.S. trade relations and by extension the Trump administration’s concerns over the strong dollar.
The euro hit six-week highs as concerns over the French presidential elections eased after centrist Emmanuel Macron appeared to come out on top in a televised debate against his main rival, far-right anti-EU leader Marine Le Pen.
Le Pen has pledged to take France out of the euro and hold a referendum on EU membership.
EUR/USD advanced 0.61% to 1.0805, its highest level since February 2.
Sterling rose to three-week highs, with GBP/USD up 0.98% to 1.2480 after data showing that the annual rate of inflation in the UK rose to the highest since September 2013 in February.
The euro was lower against the pound following the inflation report, with EUR/GBP down 0.36% at 0.8657.
The dollar fell to three-week lows against the yen, with USD/JPY down 0.61% to 111.85.
Meanwhile, the Canadian dollar hit three-week highs after stronger-than-expected domestic retail sales data and as prices of oil, a major Canadian export, rose.
USD/CAD was down 0.23% at 1.3317, after falling as low as 1.3266 earlier.